Question 1

Where and when are sheriff sales held?

Accepted Answer

Sheriff sales in New Jersey are held weekly at their respective counties. The sales happen at a designated time and location, usually at the local county sheriff's office or courthouse. Please see below for a list of the 21 New Jersey counties' websites, which will give more information about time and place for each sheriff sale. Clicking on the name of each county will take you to the sheriff's office website.   Atlantic - Thursdays 12pm Bergen - Fridays 2pm Burlington - Thursdays 12pm Camden - Wednesdays 12pm Cape May - Wednesdays 1pm Cumberland - Tuesdays 2pm Essex - Tuesdays 1:30pm Gloucester - Wednesdays 2pm Hudson - Thursdays 2pm Hunterdon - Wednesdays 2pm Mercer - Wednesdays 2pm Middlesex - Wednesdays 1:30pm Monmouth - Mondays 2pm Morris - Thursdays 2pm Ocean - Tuesdays 2pm Passaic - Tuesdays 2pm Salem - Mondays 2pm Somerset - Tuesdays 2pm Sussex - Wednesdays 2pm Union - Wednesdays 2pm Warren - Mondays 2pm

Question 2

What due diligence should I perform prior to the sheriff sale?

Accepted Answer

It is always recommended to try to see the property in person before you decide to bid at auction. Seeing the property in person will give you a better idea about its condition. Please note that by law, you cannot actually enter the premises to assess its condition. You can only view it from the outside by walking or driving by. If you can’t see the property in person, you may wish to speak to realtor or someone who is familiar with the area to see if they can advise you. Another important factor to consider is if the property is currently vacant or occupied. If it is occupied, you may need to go through an eviction process. The eviction process can vary based on location and there are laws in place protecting renters rights, so you will need to factor in the time it takes to complete eviction if you plan on selling quickly. Finally, it is prudent and recommended by all sheriff offices in New Jersey that you perform a title search to uncover potential liens/judgments that you may be responsible for after auction.  Parts of the search can be done at the county land records room but other searches (such as judgments) need to be performed at the state level.

Question 3

Why do I need a title search?

Accepted Answer

The biggest concern for a potential investor bidding at a sheriff sale is potential title issues. Prior mortgages that have not been paid, liens, judgments, and delinquent taxes/water & sewer bills are the most common issues that are uncovered.    A preliminary title search is the easiest way to uncover these issues so you can make an informed decision BEFORE bidding at auction. Title searches can range greatly as far as what is included in the search. It can also become significantly more expensive if it is ordered through a third party that is not the company actually performing the title search (less than 1% of title insurance agencies and law firms in NJ perform their own title searches).

Question 4

What goes into a title search?

Accepted Answer

A title search is simply an examination of public records regarding real property. A title searcher will examine recorded deeds, mortgages, liens, judgments, and other records pertaining to real property to uncover potential title issues.    In addition, tax records are requested from the township and examined by the searcher to paint a clear picture about what may or may not be owed.   Finally, a statewide judgment search is suggested for sheriff sales. It is important that whomever you order a title search from is aware of the purpose of the search as title searches can come in many forms but still be called “title searches”.   Order a title search HERE!

Question 5

What liens or judgments are "wiped out" via foreclosure?"

Accepted Answer

In many cases, junior liens can be wiped out by the foreclosure. Simply put, a junior lien is any lien recorded AFTER the senior lien (with the senior lien being the oldest recorded lien of record).   During the title search, the searcher will examine the lis pendens to see if junior lienholders are named as defendants. If the junior lienholders are named directly in the lis pendens, it is more likely that the junior lien will be wiped out via the foreclosure of the senior lien.   In the case of judgments, in most instances a creditor will not pursue the judgment if it is for a dollar amount of less than $5,000. Similar to junior liens, if a creditor is named directly in the lis pendens then it is highly likely that the judgment will be wiped out via the foreclosure. If you see a massive list of judgments in the judgment search, there is not necessarily a reason to panic. Judgments are typically filed by name so a common name will yield dozens, if not hundreds of results that may or may not be pertinent. Be especially wary of judgments with direct “hits”, meaning matching address, a rare name, or if multiple names on the deed are within the same judgment.   Tax liens (municipal and federal) are perpetual liens and are NOT wiped out via foreclosure.

Question 6

What is NOT "wiped out" via foreclosure?"

Accepted Answer

Superior liens, judgments and other liens not named by the plaintiff in a foreclosure, tax liens, most water/sewer balances, HOA/condo association balances (at least within the last 6 months), may all survive a foreclosure.  Ownership interest in the property not accurately served may also have claim to a property.

Question 7

Do I need an attorney to buy at sheriff sale auction?

Accepted Answer

While it is always recommended that you hire an attorney, many sheriff sale investors choose not to hire an attorney because there might not be a typical attorney review period or traditional contract negotiations. If you need recommendations for an attorney who specializes in these types of transactions please contact us.

Question 8

Why do properties keep getting postponed or cancelled?

Accepted Answer

Here is a tip. You can sometimes eliminate certain properties from your list by looking at its status history on the county sheriff's sale listing. If a property's sale has been postponed or adjourned before, it will likely be postponed or adjourned again, often indefinitely. A postponement or adjournment usually indicates that the foreclosed owners are actively trying to modify their loan or sell their property through a short sale (thus avoiding foreclosure).    Also noteworthy is that at any time prior to the sheriff sale, a homeowner can file for bankruptcy protection. If this happens, the sheriff sale is cancelled. If you go to an auction expecting to bid on a property but the auctioneer never announces it, it may have been postponed, adjourned, or the homeowner may have filed for bankruptcy protection.

Question 9

Now that I have won the auction what is next?

Accepted Answer

There is a 10 day waiting period called a “redemption period” in which a defendant can redeem the property (although this is a rare occurrence it does happen). The sheriff can start charging interest on any amount due but the successful bidder has 30 days from the day of the successful bid to bring in the remainder owed. During this time-period, it is highly recommended by every sheriff’s office in New Jersey that title insurance be purchased as a property purchased at sheriff sale is not guaranteed to be free and clear. A title insurance agency experienced in working with sheriff sales will run a number of necessary searches beyond just the preliminary search (including searches that verify that the foreclosure was done properly and all the pertinent parties were correctly served), examine and either fix or point out issues. In some cases, a title insurer may find that the property is uninsurable. In these cases the sheriff may refund the deposit if sufficient evidence is provided. After you have done proper due diligence and gathered the remaining balance in the form of a bank check, you will need to pick up the deed from the sheriff’s office (Some title agencies may also offer to pick up and record the deed on your behalf). Finally, you will need to take that deed to the county recorder’s office to be recorded. Unlike most regular transactions in NJ, the “seller” in a sheriff sale, is not going to pay transfer tax which then falls to you as the buyer. For a chart on what counties require the buyer to pick up the deed in person AND the delay for picking up a deed check our our chart. As there are constant changes at the county level, kindly let us know if there is an update.

Question 10

Can I get a loan for the property?

Accepted Answer

While most traditional lenders do not offer loans for properties purchased at sheriff sales, there are some specialty lenders who offer loans specifically for Auction properties. You will need a lender that understands sheriff sale properties (a major fear for lenders is not having a deed at closing which will be a normal occurance for sheriff sales). As the buyer, you will also need a lender who can close in a very short period of time given the time sensitive nature of a sheriff sale. We would recommend establishing contact with a lender as early as possible. Please contact us for more information about these special lenders.

Question 11

How much title insurance cost?

Accepted Answer

This is by far the most common title insurance question that we get. First of all, it is misleading statement that all title insurance companies charge the same. The overall cost for title insurance can be broken up into 3 main parts (premium, fees, settlement+closing). Premium: Asking a title insurer “how much do you charge for title” is a dead giveaway that you are new. It would be like walking into a Geico office and asking “how much do you charge for auto”? Obviously, the risk (and therefore the cost) to insure a million-dollar car is different than a 10,000 vehicle. The premium is the portion of title insurance that reflects risk and the maximum coverage. Usually the largest part within the cost for title insurance, the premium IS actually regulated by the state. This is calculated using a graduated table and depending on the amount insured (purchase price and loan amount). If one title company shows a different premium than another, someone has input something incorrectly. Title Fees: Title fees represent costs that are typically incurred by a title insurance agency in order to insure. These common include various searches that must be run, the cost to examine the searches, the cost that transaction software’s charge, costs associated with printing and shipping documents, cost to file initial documents prior to closing, and several other common charges. Title fees are only loosely regulated and can vary from some title companies that are more on the conservative side to those who feel they can charge a higher amount (and not always justifiably so). Settlement/Closing: Until recently, settlement/closing was performed mostly by attorneys in central and northern NJ. However, with the changes in regulation and paperwork a couple years ago, many attorneys decided that it was just not worth the extra time and risk associated. It was also difficult to convince buyers to pay extra for their services. This work includes coordinating with both sides (attorneys, lenders, realtors) in order to create an agreed upon Closing Disclosures (previously called a HUD), attending (and often running a closing), collecting and disbursing all funds, ensuring that all documents are properly recorded at the courthouse. Although this is quite a bit of extra work, some title agencies have opted to charge exorbitant amounts while others remain at a more reasonable fee. In most cases, anything $500 or higher can be considered to be on the more expensive end. A savvy buyer should also be wary of additional fees charged in the form of “after hour closings”, “travel costs”, “post-closing costs”, which should all be considered as a settlement/closing charge.

Question 12

Do I need title insurance for sheriff sales?

Accepted Answer

As Title Insurance protects a buyer from the past versus the future, it should seem obvious that a property that was in distress long enough that it went to a sheriff sale should theoretically have an even greater risk of inheriting debts than a traditional retail purchase. A novice investor may think that a title search is sufficient but there are many items that a title search does not detect such as defects in the foreclosure process which gives the defendant as many as 10 years to redeem the property (you may have to say "goodbye" to any money spent on renovations). There may also be debts that were either not filed or not filed correctly, both of which would not be included in the title search. Finally, a title search is not going to correct title issues, such as undischarged mortgages or tax liens, even if they find them. This will add additional hurdles and potential headaches when it comes time to sell. Title Insurance should ideally be ordered the day as early as possible after the bid is won in order to give the title company ample time to order adequeate searches, examine title, and correct issues BEFORE the remaining balance is paid. In many cases, if a major title defect is detected, the sheriff may refund the initial deposit.

Question 13

Can I "wholesale" or "assign" this bid to another buyer?"

Accepted Answer

Some buyers will go in with the intention of assigning a bid (usually for money) to another buyer. This could be because they don't have the funds to actually pay the remaining balance or simply because this is their business model. Regardless of the reason, this has become such a common occurence that most county sheriff's are aware and even accomodate this practice. Some sheriff offices charge an "assign fee" or "name change fee" usually starting at $75. Worth noting, however, is that some offices have restrictions as far as how many days after auction a winning bidder has to do this. Some offices also may give the winning bidder a harder time than others. We've done our best to compile a chart for your convenience (HERE). Please kindly let us know if there are any changes or updates.   If you have already ordered title insurance from your title company, be kind and let them know if this is your intention. Many are willing to help you or work out an arrangement that could be mutually beneficial.

Question 14

Why is there a delay to pick up my deed?

Accepted Answer

Sheriff Sale transactions have skyrocketed