January 12th, 2017

Purchasing a Property at Sheriff’s Sale

Interested in purchasing a property at a sheriff’s sale?  Don’t be fooled by the glitz and glamour of all the popular house-flipping TV shows. It is important that you do your homework and know what you are getting into before placing a bid.

A sheriff’s sale occurs when homeowner defaults on his or her mortgage and, after fulfilling all of the requirements for notice and such, the bank sells the property to recoup its investment. However, just because a sheriff’s sale satisfies the mortgage being foreclosed on does not mean that there are not other liens negatively affecting the property. As the buyer, you would step into the shoes of the previous owner and be required to fulfill those obligations. Therefore, the first step prior to bidding at a sheriff’s sale is to obtain a title search on the property. A title search will tell you what else may be out there affecting the property. For example, there may be liens for unpaid taxes, unpaid homeowner association dues, or even other mortgages on the property.

Additionally, you will not have an opportunity to inspect the property prior to placing your bid. Sales are made as-is so there might be some surprises when you first unlock the door. People who lose their home as a result of foreclosure have no motivation to leave the property in tiptop shape. As a result, repairs, sometimes significant, are often required to make the home in livable condition. Potential costs of both time and money associated with these improvements should be considered before placing a bid.

On top of all of this, you must have the cash available to bid at a sheriff’s sale. In Lehigh County, Pennsylvania, 10% of the winning bid must be paid at the time of the sale, prior to leaving the courthouse. The initial deposit must be made via certified check and the remainder is due within 30 days.  If the balance is not paid within that time frame, the deposit may become non-refundable and the property may be re-listed for sale.

While purchasing property at sheriff’s sale can be financially rewarding, potential buyers must be aware of the risks and possible pitfalls that may come with a property. By doing your homework ahead of time, you can ensure that you are making a wise investment rather than purchasing a money pit.


Attorney Sarah M. Murray is a member of the firm’s Real Estate Group, advising individuals and companies on real estate investments and land development.