- A sheriff's auction takes place when a homeowner receives a foreclosure from defaulting on his mortgage payments. The property is then transferred to a sheriff, who auctions it off to the highest bidder. The sheriff's auction takes place at a county or district courthouse. It is often held at a regular time and day of the week, such as every Wednesday at 9:00 am. At most auctions, there is an audience of lawyers, investors, consumers and lenders, all ready to bid. Because a sheriff's auction is public, no person has to register ahead of time to attend the auction.
- The sheriff starts the auction by reading the starting bid on the property, which has been provided by the mortgage company (the plaintiff). Those in attendance then call out higher numbers until someone calls out a number than no one tops. These proceedings usually do not last long--about one hour is the norm.
- This highest bidder must make a check out to the sheriff, along with an auction fee. This person has to make out the check before 5:00 pm in order to receive the property. Once this occurs, the auction is over. In most cases, the original mortgage lender of the property pays the highest bid and wins back the property. Other times, a consumer will bid on a property and manages to purchase it at a great profit--a happenstance that attracts many real-estate investors to sheriff's auctions. If you ever wish to bid for a property, it is a good idea to research it before the auction in order to ascertain its real value. Doing this will ensure you do not pay more for the property than it merits, should you emerge as the auction's winning bidder.
