Questions about Sherrifs Sales

[kthomp66]

What is the name of your state? Ohio/PA

Hello!
I just have a few questions about sheriffs sales if anyone can help. My current rental (located in Ohio) is being seized by the Erie, PA Bankruptcy Court, and being sold, I’m assuming, at a sheriffs sale.
1. What forms of payment are accepted at a sheriffs sale? Does anyone know the amount of time for either state to make a full payment?
2. Can you get a mortgage for a sheriffs sale in either state? I can’t find anything specific to my state or PA.
3. Are backed property taxes the responsibility of the previous owner, or the new owner? There’s about $1,000 backed including penalties according to the auditors website.
4. (The next two are probably more for the LL/Tenant section, but I’m going to lump these all together if anyone can help.) If I cannot purchase my rental, does anyone know how long I have to get out? The sale is some time unbelievable august, and my LL is being vague about it all. He won’t give me any time frame.
5. How long am I responsible for rent payments? I paid my last month and security deposit upon move in, but no one can give me a clear answer on how long I’ll have to continue paying. The lease is up in October, so I may be clear Sept.-Oct. since the sale is in August, but just looking for some information on what to do there.
Thanks!

 

[Shadowbunny]

You should be able to find out when the property is scheduled to be sold here: https://www.eriecountypa.gov/county-services/safety-law/sheriff/sheriffs-sale.aspx

Most foreclosure sales require a cashier's check for X amount (in AZ it's 10K) that must be presented at the time of the winning bid, with the remainder due usually shortly (thing 24 hours) after the sale. The time frame generally isn't long enough to secure a mortgage.

And you can research your rights as a tenant facing a foreclosed property here: https://www.northpennlegal.org/sites/www.northpennlegal.org/files/16_Sale or foreclosure of the rental property_0.pdf

 

[Taxing Matters]

What is the name of your state? Ohio/PA

Hello!
I just have a few questions about sheriffs sales if anyone can help. My current rental (located in Ohio) is being seized by the Erie, PA Bankruptcy Court, and being sold, I’m assuming, at a sheriffs sale.

If the bankruptcy court is selling it then it is not a sheriff's sale. Rather, the bankruptcy trustee sells it. On the other hand, the trustee might abandon the asset and a secured creditor with a lien on the property (like the mortgage company) may seek and get relief from the stay imposed in bankruptcy to foreclose that lien. In that case, the sale will follow the procedures for that type of sale in that state.

1. What forms of payment are accepted at a sheriffs sale? Does anyone know the amount of time for either state to make a full payment?

Typically you need to pay the full amount once you are the accepted bidder.

2. Can you get a mortgage for a sheriffs sale in either state? I can’t find anything specific to my state or PA.

You'd need to get a lender to approve you for the loan prior to the sale for that. The sheriff or court certainly won't give you a mortgage.

3. Are backed property taxes the responsibility of the previous owner, or the new owner? There’s about $1,000 backed including penalties according to the auditors website.

Those attach to the property and if the sale does not pay off the taxes then the buyer might get stuck paying them.

4. (The next two are probably more for the LL/Tenant section, but I’m going to lump these all together if anyone can help.) If I cannot purchase my rental, does anyone know how long I have to get out? The sale is some time unbelievable august, and my LL is being vague about it all. He won’t give me any time frame.

It depends on exactly what kind of sale it is. If it is a foreclosure sale, federal law generally requires the buyer give you at least 90 days notice to move out.

As far as paying rent, you need to continue paying that to your landlord or trustee until the landlord no longer owns it. Then you may need to pay the new landlord the rent if the rental contract survives the sale.

 

[FlyingRon]

Shadow is pretty right about the way almost all foreclosure/bankrutpcy or other auctions go.
You put up $10,000 or whatever in cash or certified funds before they even let you bid in many cases. If you win that gets surrendered immediately and you have a very short time to transfer certified funds to the seller (usually a day or less).

As for getting tenants out, it very much depends on the local eviction laws. THERE IS NO FEDERAL PROTECTION FOR TENANTS IN FORECLOSURE ANY MORE (that expired a few years back). Some states still have it. Foreclosures wipe out any tenant leases. Bankruptcy may or may not (it's involved as to the situation). Other private sales (even if done by auction) do not.

 

[HRZ]

As a practical matter recovery of your security at end of lease may be a very daunting task ..even if supposedly the LL was to hold your funds in a separate account from him personal accounts .

As a practical matter if you stop paying rents it may take others a good bit of time to respond , if they take any action at all

Be hypercareful about buying a property in bankruptcy wo legal advice and careful title search...there may be piles of other liens against the property

 

[kthomp66]

Thanks everyone!
i don’t know if this helps to clarify, but to my knowledge, the only lien on the house is the backed property tax. the home was given to the LL in 2016 through a death, so there should be no mortgages or anything on it. the bankruptcy court decided they wanted it sold becaue it’s an asset, and the LL can’t afford the original payment amounts for the chapter 13. i’ll have to contact the erie courthouse and see if they can give me any ideas on how the sale will work (if anyone wants to be helpful lol).
also, i already have a mortgage approval for 30k, and i have 10% to put down. i have to check with my broker to see if they count that as their down payment or if id need more. depending on the starting bid, $30k would be my max bid.

 

[Mass_Shyster]

Thanks everyone!
i don’t know if this helps to clarify, but to my knowledge, the only lien on the house is the backed property tax. the home was given to the LL in 2016 through a death, so there should be no mortgages or anything on it. the bankruptcy court decided they wanted it sold becaue it’s an asset, and the LL can’t afford the original payment amounts for the chapter 13. i’ll have to contact the erie courthouse and see if they can give me any ideas on how the sale will work (if anyone wants to be helpful lol).
also, i already have a mortgage approval for 30k, and i have 10% to put down. i have to check with my broker to see if they count that as their down payment or if id need more. depending on the starting bid, $30k would be my max bid.

The job of the bankruptcy trustee is to generate as much revenue as possible from the assets to pay of the creditors. I'd suggest writing a letter to the trustee indicating that you are interested in purchasing the property. He or she will be more likely to let you know what's going on in order to get the most out of the sale.

You should also get in touch with your mortgage lender and let them know what is going on. A $30k pre-approval is not the same thing as an approved mortgage.

 

[Taxing Matters]

A $30k pre-approval is not the same thing as an approved mortgage.

That's really important. A pre-approval is just a review indicating you meet some basic requirements for credit worthiness. But as most people who have ever applied for a home mortgage loan can attest, getting the actual loan requires giving the lender a ton of information as well as getting title reports, inspection of the property, etc. The problem with auctioned houses is that you generally cannot do all of that before the auction, which puts a significant hurdle in the way to having a lender standing by to issue the loan within the very short period you have to cough up the money if you are the successful bidder. Buyers at these sales generally have the cash on their own or have standing credit arrangements with a lender they can tap that do not require what a typical home mortgage lender wants. These are not sales that are easy for the average person to pull off, and they tend to come with a fair degree of risk.

 

[HRZ]

I believe a trustee can hold up or stay a sherrifs sale if trying to work out a better deal with you ...but be careful, trustee is in the equation to get the matter wrapped up as best he or she can ....not to help you per se. ...

 

[adjusterjack]

i already have a mortgage approval for 30k

As your lender for an irrevocable letter of credit guaranteeing you the loan of $30,000 whenever you ask for it. The response will tell you if you really have "approval."

 

[FlyingRon]

Either you have the money on hand, or you have a good standing for a lender to give you an instant unsecured loan that you pay the auction with until you can wrangle regular finance secured by the property. I did a bunch of auction stuff in my day. The commercial banks will be able to arrange your credit to do this (secured against other things you own in some cases). Or you can gamble that you'll flip the property before the rather high interest rate on the bridge money kills your profit.

 

[STEPHAN]

The biggest mistake I have seen over and over from people who don't know what they are doing is buying a second. I would work with a competent lawyer.