A sheriff sale, from default to deed

A sheriff sale is a public auction, ordered by a court, at which a county officer sells real estate to pay a judgment against it, most often a foreclosed mortgage. Investors also call them sheriff auctions or foreclosure auctions. This register holds sales from 164 counties in 13 states, read from the sheriffs' own sale lists, and 7,701 of those sales are still to come.

Sheriff sale vs. foreclosure

Foreclosure is the legal process that ends a borrower's right to the property; the sheriff sale is the auction at the end of it, in the states where foreclosure goes through a court.

There are two ways to foreclose a mortgage in the United States. In a judicial foreclosure the lender sues in the county court, the court enters a judgment for what is owed and orders the property sold, and an officer of the court sells it. That auction is the sheriff sale. In a non-judicial foreclosure the loan is secured by a deed of trust with a power of sale, and a private trustee sells the property after the notices state law requires, without a lawsuit. That is a trustee's sale. It is not on a sheriff's list, and this register does not carry it, as the methodology explains.

Some states use one method, some allow both, and the security instrument often decides which applies. Federal servicing rules govern both: a mortgage servicer may not make the first notice or filing for any judicial or non-judicial foreclosure until the loan is more than 120 days delinquent, with narrow exceptions ^[1].

Sheriffs sell on other judgments too: a creditor's execution against a debtor's real estate, a condominium or homeowners' association lien, and in some places delinquent taxes. Those sales follow the same path, but what the buyer gets can differ, as how to buy a house at a sheriff sale explains.

From default to deed

Each state names the steps differently, but a judicial foreclosure moves in the same order everywhere.

1. Default and notice. The borrower stops paying. Before suing, the lender sends the notices federal and state law require. New Jersey, for example, requires a notice of intention to foreclose sent 30 to 180 days before the complaint ^[2], and a Pennsylvania residential foreclosure complaint should aver compliance with that state's own pre-foreclosure notice ^[3].
2. Complaint. The lender, now the plaintiff, files a foreclosure complaint naming as defendants the borrower, the owner and anyone else with a recorded interest, such as a second mortgage holder or a judgment creditor.
3. Judgment. Most foreclosures are not contested, and the court enters judgment by default; contested cases go to motions or trial. The judgment fixes the amount due and orders the property sold.
4. Writ or order of sale. The court clerk issues a writ of execution (in Pennsylvania and New Jersey) or an order of sale (in Ohio) directing the officer to sell. In Pennsylvania, a foreclosure judgment "shall be enforced by a writ of execution" ^[4]. In Ohio the sheriff first has the property appraised by three local freeholders ^[5].
5. Advertisement. The officer posts and publishes notice of the sale. Ohio advertises once a week for at least three consecutive weeks ^[6]. Pennsylvania posts a handbill and publishes for three weeks, the first at least 21 days before the sale ^[7]. New Jersey posts the notice at the property at least three weeks ahead and publishes it four times in two newspapers ^[8]. The sheriff's sale list, with each property, case number, plaintiff and date, comes out of this step.
6. The sale. The officer auctions the property to the highest bidder, in a courthouse room or on an online auction site. The winner pays a deposit at once and the balance later.
7. Confirmation and deed. In some states the court reviews the sale before a deed issues: Ohio's court confirms it within 30 days of the return of the writ if the sale was regular ^[9]. In others there is no confirmation. In Pennsylvania "Confirmation of the sale by the court shall not be required" ^[10], and the sheriff executes the deed once the period for exceptions to the distribution has passed. The officer then delivers a deed: a sheriff's deed, a commissioner's or referee's deed, or in Florida a certificate of title.

From complaint to sale commonly takes months; a contested case or a bankruptcy can stretch it to years.

Who holds the sale

Whoever holds it, the sale works the same way, and this register reads whichever office's list is the official one.

The plaintiff's credit bid

The plaintiff does not need cash to bid at its own sheriff sale: it bids the debt the judgment says it is owed, and an outside bidder has to beat that figure.

The foreclosing lender is entitled to the sale money, so making it hand cash to the sheriff only to be paid it back would be circular. Instead it makes a credit bid. Pennsylvania's rule tells the sheriff to accept the purchaser's receipt "up to the amount of the proceeds to which the purchaser is entitled" ^[13], and Ohio excuses the plaintiff from the deposit every other bidder pays ^[14].

The plaintiff's ceiling is usually the judgment plus interest and costs. In New Jersey it is called the upset price, and many sheriffs announce it only at the sale. The plaintiff may open lower and raise its bid only if someone bids against it. If nobody outbids it, the plaintiff takes the property, which becomes bank-owned. Where the law sets a minimum, the bid has to meet that too: at an Ohio first sale, a property cannot sell for less than two-thirds of its appraised value ^[15].

The foreclosing lenders pages show the banks, servicers and trusts bringing sheriff sales, and every county they foreclose in.

Redemption: when the owner can still pay

Owners can usually stop a foreclosure by paying what is owed. For a bidder, the question is how long that right lasts.

• Until the sale, or until the court approves it. In Florida, an owner or junior lienholder can cure the debt and stop the sale until the clerk files the certificate of sale ^[16]. In Ohio the debtor can redeem "at any time before the confirmation" of the sale by depositing the judgment, costs and interest with the clerk ^[17], so a winning bid there is not safe until the court confirms. New Jersey's court rules leave a short period after the sale, before the deed is delivered, in which a party can object; New Jersey sheriff sales covers it.
• After the sale, by statute. A few states give the owner, or a junior creditor, a set period after the sale to buy the property back from the purchaser. Pennsylvania does this for sheriff sales on tax and municipal claims: nine months from the acknowledgment of the sheriff's deed ^[18], or three months in Pittsburgh and Allegheny County ^[19]. And where the United States held a junior lien, federal law gives it one year to redeem, or for a federal tax lien 120 days or the state's period, whichever is longer ^[20].

Until any such period has run, the purchaser's title is subject to it. Check the state's rule before you bid, and price the wait.

Where to go next

• How to buy a house at a sheriff sale: research, the deposit, what survives the sale, and the weeks after it.
• Why sheriff sales get postponed: adjournments, bankruptcy stays, and how to read a postponement history.
• Each state's procedure: New Jersey, Ohio and Pennsylvania.
• The sheriff sale calendar lists every county's upcoming sale days, and the glossary defines the terms.