Has Anyone Ever Bought a House at a Sheriff's Auction?

[Calamity Jane]

The house next door to my parent's was foreclosed on and put up for auction. My step-dad went to the auction with the intent of just seeing what it went for. He's nosy like that.

He got there early, and was talking to the auctioneer about how these things work, as he'd never been to one before. The auctioneer explained that generally, a lawyer comes and bids whatever is owed on the house (in this case, $48,000) and then open bidding starts at $1 over that amount.

They stood around talking until the courthouse clock bonged 10 o'clock, which was when the auction was set to begin. No one else had shown up. No one. So, the auctioneer went through his speil, just as if there were 20 people standing around. He asked for a $48,000 bid. Silence. So, he said "Does anyone want to make a bid on this property, in any amount?" My step-dad bid $2000. The auctioneer did his 'going once, going twice, sold' thing. They went into the courthouse, signed papers, my step-dad turned over the $2000 and walked out owning a house and an acre and a half of land. 10 minutes later, the secretary for the lawyer came running in and demanded that they start the auction over. Didn't happen.

My step-dad got a phone call on Saturday from the lawyer. He claims that the auction was illegal and that he's filing suit against the county, the auction company, and my step-dad. He said that the house cannot sell for less than is owed on it.

Obviously, I'm not a lawyer. But as near as I can tell, everything was done according to the rules. It's not my step-dad's fault that the lawyer sent a secretary, and that she was running late.

Does a real-estate auction work like any other auction, in that if you don't get the desired bid, you keep going down until you find a price people are willing to pay?

Getting this house, and the rental income off of it is my parent's one and only shot at retiring. Ever. I'd hate to see them lose it because someone fucked up, but I know that they'd give it up in a heartbeat if they thought they'd done something wrong.

Anyone know how these things are supposed to work?

 

[SINthysist]

Yes. Got a good price.

But then the law allowed the owner to come in so many days after the auction and pay back taxes and such thus gettng the property back.

But that was just one instance.

 

[mritsme]

wow that is weird, i am not sure of the laws or rules but it sounded fair to me if that was an unappropraite bid the auctioner should have known and said something at that time. So he should get to keep the house no matter what. Keep us posted

 

[Shy Tall Guy]

I think this would require some research by a local lawyer. I would suggest your father consult with one who is knowledgeable in the local laws. The laws may vary by state and even county, so it is hard to say whether the auction is legal or not. It wouldn't cost your dad much to just talk to a real estate lawyer for about 30 minutes to an hour - some of them even do the first 30 minutes free.

That is the extent of my advice.

Just a side note - I never engage in any auctions where the property, whether it is a house or a car or a boat, is the result of seizure by the government due to alledged criminal activities. For one thing I don't think some of those activities should be criminal, for another, sometimes the property is seized "In Rem" - i.e, the property is accused of the crime and the owner must prove that they legally acquired the property. I think such seizures are a travesty of justice.

 

[KillerMuffin]

Tell him to get a lawyer for this, otherwise he could be screwed.

You never know about that Show Me state. Buncha fucked up people living over there.

I mean hell, you got people that make Synth look sane. I should know, I'm related to 'em. Thank gawd they're just noddin' kin, tho.

 

[Calamity Jane]

It wouldn't cost your dad much to just talk to a real estate lawyer for about 30 minutes to an hour - some of them even do the first 30 minutes free.

Just a side note - I never engage in any auctions where the property, whether it is a house or a car or a boat, is the result of seizure by the government due to alledged criminal activities.

He's calling a real estate attorney today.

This wasn't a seizure auction, though the people are rather well done dealers in not exactly legal substances. They've lived in the house almost 2 years and have made one house payment. They're actually pretty pissed at my step-dad, because apparently they're liable for any amount still owed after the auction. As if they weren't liable for the whole amount when they signed the papers with the bank.

 

[Calamity Jane]

Tell him to get a lawyer for this, otherwise he could be screwed.

You never know about that Show Me state. Buncha fucked up people living over there.

I mean hell, you got people that make Synth look sane. I should know, I'm related to 'em. Thank gawd they're just noddin' kin, tho.

LMAO.

But Killer... my parents live in the land of ah's! Gotta love Riley County!

 

[Rambling Rose]

I don't know about you guys, but I have a hankerin' to go hang out at the courthouse!

$2000. Wow.

 

[CarolineOh]

If you bought your house at a sherrif's auction.......you might be a redneck.

 

[bluespoke]

I mean hell, you got people that make Synth look sane.

Please tell me you're fibbing!

A whole bunch that make Syn seem sane?

Ye Gods, there is no hope!

 

[Calamity Jane]

If you bought your house at a sherrif's auction.......you might be a redneck.

In my family, there is no 'might'.

 

[RhumbRunner13]

I think your Dad owns a great piece of property at a very good price!

The lawyer can "threaten" to sue anyone he chooses but I think your Dad has very limited exposure. The lawyer or his client have a great deal of exposure, as might the Auctioneer. The property should have been presented with a "Reserve" (minimum bid). The auctioneer should have a contract to sell the property and that contract should stipulate "No Reserve" or the amount of the "Reserve Bid".

If the auctioneer sold the property that had a reserve, he should be liable for the remaining $46,000. If the Mortgager indicated a desire to the lawyer for a reserve that the lawyer mishandled, the lawyer is liable for $48,000, my suspicions! If the mortgager made no stipulation concerning reserve, they are exposed to the lose but may have a case against the lawyer as well.

Tell your Dad to stand up for his rights but he would want to check with an attorney just to be safe.

***I am not an attorney....I only play one on the internet!!***

Rhumb

 

[Rambling Rose]

Hey, do you think they sell houses on eBay?

 

[CarolineOh]

Hey, do you think they sell houses on eBay?

Yes, they do.

 

[Texan]

I think your Dad owns a great piece of property at a very good price!

The lawyer can "threaten" to sue anyone he chooses but I think your Dad has very limited exposure. The lawyer or his client have a great deal of exposure, as might the Auctioneer. The property should have been presented with a "Reserve" (minimum bid). The auctioneer should have a contract to sell the property and that contract should stipulate "No Reserve" or the amount of the "Reserve Bid".

If the auctioneer sold the property that had a reserve, he should be liable for the remaining $46,000. If the Mortgager indicated a desire to the lawyer for a reserve that the lawyer mishandled, the lawyer is liable for $48,000, my suspicions! If the mortgager made no stipulation concerning reserve, they are exposed to the lose but may have a case against the lawyer as well.

Tell your Dad to stand up for his rights but he would want to check with an attorney just to be safe.

***I am not an attorney....I only play one on the internet!!***

Rhumb

hello Rhumb,

just a couple of things. Property that has been foreclosed upon and is sold by a government agency to satisfy a debt, (usually a 1st mortgage, property taxes, deed covenant violations), is not handled the same as most property sold at auction. Most state laws require that the sale is final to force a resolution of the matter that is before the court. Because of this, there is almost never a "reserve" put on sherif sale property; however, the clerk of court usually has an "initial bid" placed by the mortgage holder as a function of the foreclosure proceedings.

In the case that PG mentioned, there are a couple of interesting things working. The market value of the property is probably around the $48K that the morgtage company is owed. (PG mentioned that the people who had been living in the house had lived there for only two years, and that they had only paid one payment.) This is the reason that the mortgage company's lawyer probably did not have an "initial bid" placed on the property. They probaby wanted to buy the house from the county at a very low price, (the actual money goes to them anyway) in an effort to effect a larger loss on paper. The loss might be guaranteed by FHA or VA, or insured. Then later when the house is resold, they would benefit from the porfit. This a commonly used technique.

It appears to me that the lawyer for the mortgage company really screwed up.

I am not a lawyer, but I have purchased property (usually vacant land) at sherif's sales. To those that think this is just a practice of rural areas, (ie. the redneck comment) you should know that somewhere in EVERY county, there is a sale going on at least once each month. If you have a few bucks, and want to have a little gambling fun, go to a sale and bid on some of the unopened boxes from mini-storage warehouses.

PG, I think you parents are safe, and I believe they don't need to do anything. The lawyer CAN sue, and probably will. He will be trying to scare your parents into selling the property to the mortgage company for about what they paid. Unfortunately, the lawyer/mortgage company has the ability to cost your parents some significant money in legal fees. The lawyer can use that as a motivation to get your parents to negotiate a low priced sale.

One thing your parents can do is to put the property up for sale. By that, I mean they can list the property with a real-estate agent and put a sign in the yard. (list it for a price that is too high to actually allow it to sell). This should scare the hell out of the lawyer and hopefully get them to come to some quick resolution of the situation.

Good luck.

 

[RhumbRunner13]

"It appears to me that the lawyer for the mortgage company really screwed up."

You have much more knowledge and experience with these auctions than I, but I had a feeling that your statement defined the "threats" recieved from the lawyer. So much depends on the state laws as well. I had a lawyer once in an "Oil Enterprise" case that said, "We are going to sue EVERYONE! We will stomp around in the dirt and see where the dust settles!"

Rhumb

 

[SINthysist]

See Sexy-Girl's thread about the mac ad for my explanation of KANSANS !

I mean let's face it. We produced the likes of John Brown, Carrie Nation, that crazy preacher in Topeka who REALLY dislikes gays...

I'm tellin' you all. I AM THE SANE ONE!

 

[Problem Child]

I'll give your dad $3,000 for it.

 

[perks]

I saw this documentary and for the life of me I can't remember the name of it.

but, these people decided not to pay their federal taxes because they didn't want to support any type of military expression by the US. Their house was seized and auctioned off and sold.

However they staged like a 2 year sit in with friends and family. The people that bought the house never got live their without the original people picketing, camping out on their property and more often than not being in the house.

Several different judges had different rulings based on different cases, but nothing was ever done and it fizzled out. The people that bought the house just settled with them, and then they left not even half a year after.

I'm not sure the law will help you.

 

[Problem Child]

$3250.

 

[Problem Child]

$3,500.

 

[Calamity Jane]

SOLD!

I have this fantasy involving the man next door...

 

[Jim_Henson]

So you dont have one about the next room then?

Goood.