What are sheriff's sales?

FALLBROOK – A sheriff's sale is a type of auction at which defaulted or repossessed properties are sold at the end of the foreclosure process. According to Investopedia.com, the proceeds of a sheriff's sale are used to pay mortgage lenders, banks, tax collectors, and other litigants who have lost money on the property being sold.

Sheriff's sales are not conducted when a homeowner misses a mortgage payment. In fact, such sales take place only after lenders have notified borrowers of default and given them time to catch up on missed payments. Sheriff's auctions are conducted in public, often outside a local municipal building, such as a courthouse.

Notices of sheriff's sales can typically be found in local newspapers or via sheriff's office websites. Properties auctioned off during sheriff's sales go to the highest bidder, who typically must provide certified proof of their funding prior to making a bid.

Properties up for auction may include single- and multi-family homes, mixed-use properties, large complexes, and commercial buildings. Prospective bidders should do a little homework prior to participating in a sheriff's sale so they can be certain what they're getting into before bidding on a property.

For example, some properties may have tax liens on them, and if such liens were not wiped out during foreclosure proceedings, winning bidders may be responsible for paying them. Bidders also should be prepared to close quickly on a property should their bid prevail, as many sheriff's sales require closing within 30 days of submitting a successful bid.