Good deals can be found at sheriff’s sale, but so can risks
This home, located at 101 Ivy Lane in Luling was to go to auction on Oct. 15, but since the hurricanes, recent sales have been delayed by two to three weeks. Mortgage owed on this home is $97,940.91.
But for most people, the legal jargon describing each property may make it difficult to clearly understand how and why a particular piece of real estate is being auctioned - and if looking into bidding on the property is even worth it.
According to the St. Charles Parish Sheriff’s Office Civil Process Supervisor, Cynthia Hymel, houses and other parcels of land usually go up for sale because the owner has failed to pay the mortgage.
“Many of the properties go up for auction at a sheriff’s sale because of unpaid mortgages or judgements,” she said. “But another type is a partition sale. This takes place when co-owners can’t agree to an amicable settlement of partitioning community property.”
The prices listed with each property listing is the debt owed at the time of the foreclosure.
“Additional fees may include attorney fees, interest, court costs, sheriff’s fees, commissions and taxes,” said Hymel. “And the entire amount of the bid is due in the form of a cashier’s check by 2 p.m. on the day of the sale.”
All additional fees are to be paid by the winning bidder.
Hymel points out that the amount of the opening bid is determined by the foreclosure amount being offered with or without the appraisal.
“If a property is offered with an appraisal, we start bidding at two-thirds of the appraised value,” she said. “If without, we start at $1,000 or costs, whichever is higher.”
Bidders can find out the appraised value of the property by calling the sheriff’s office the Monday before the auction.
If the suit is offered with appraisal and the minimum sale price is not met, the property would be auctioned at a later date without appraisal and for costs only. Hymel says that if the minimum bid is not met and the suit is without appraisal, then the plaintiff would pay the costs and decide whether or not to pursue it any further. She also notes that mortgage companies must go before the courts before a property is deemed eligible for auction.
“The mortgage company presents the necessary documents to the courts and the judge signs a court order to proceed with the sale,” she said.
While many real estate enthusiasts believe that there are good deals to be made at a sheriff’s sale, there are also risks. For instance, properties cannot be viewed or inspected before going to auction.
“The bidders do not have access to the property to view it before making a bid,” Hymel said. “In most cases the house is still being occupied by the owners and they are allowed to remain in the property until the sale.”
And when asked whether or not buying property through a sheriff’s sale is a good investment, Hymel says that it’s a matter of opinion.
“The majority of houses foreclosed upon have high debts and sometimes are not in good condition.,” she said. “It’s a blind purchase.”
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