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Spooner2562, Home Buyer in Strongsville, OH

Can I use my pre approval at a sherrifs auction ? They say 10% cash on the bid is required?

Asked by Spooner2562, Strongsville, OH Thu Jun 9, 2011

Can I use my pre approval at a sherrifs auction ? They say 10% cash on the bid is required?

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Scott Gray’s answer
I can tell from the question you are not ready for Sheriffs auctions. At Cuyahoga County Sheriff's auction you put 10% down immediately (just take a cashiers check of $10,000 because that will cover any purchase) before leaving the room then have 30 days to pay for the house or lose your 10% at which time it goes back to on the auction agenda. This is predominately a cash business. So unless you have $100-$150,000 dollars sitting around, don't get involved. In a nice suburb it will cost you a minimum for $100,000, at auction, to purchase then you have the expense of renovations, taxes, etc. and that is if everything goes as planned! Try to get homeowners insurance on one, it can't be done. You self insure. Then you identify a house that you want, put in your due diligence, fits into your budget, get all excited thinking about how much money your going to make, then go to auction. It has been appraised by the Sheriff's department $100,000 has a minimum opening bid of $66,667 when the first bid out of the bank representative is $171,513.25. Then you proceed to pick your self up off the floor thinking "there must be a better way"
0 votes Thank Flag Link Tue Nov 20, 2012
BEST ANSWER
Dear Home Buyer,

First of all, I am assuming you are talking about a Sheriff Sale in Cuyahoga County. It appears that you may have already read the website information: http://sheriff.cuyahogacounty.us/en-US/Terms-Sales.aspx

I cannot stress enough to read this VERY carefully -- and more than once! Note that the 10% deposit must be paid immediately by cash, bank money order, or certified check (obviously can be tricky since you do not know what the end sale price may be if there are others bidding on the property - in all likelihood, you will find yourself bidding against the bank that held the original mortgage note that defaulted).

You have 30 days to close the purchase --- note that there is interest included if the deal cannot close before 8 calendar days on a traditional bank foreclosure or 15 days for a tax foreclosure.

My best suggestion to you would be to contact the lender who did your preapproval and let them know your intentions so there are no snags or issues later for you. Also, have a title company ready as well as a real estate attorney.

Feel free to contact me with any more questions or concerns.
Thank you - Cathy Miller, CDPE, Realtor, RE/MAX Beyond 2000; catherinemiller161@hotmail.com; Cell: (216) 469-7920
0 votes Thank Flag Link Thu Jun 9, 2011
I agree with all the posts, in addition... Please do your due diligence of checking records with the clerk of county courts as to mechanics leans and water past dues, these go with the house and you may have to carry them, unlike past taxes or second mortgages, etc.
Also, you are not allowed in the property until you have a deed in hand, not just confirmation, the actual transferred deed in your name recorded by the county. This means the bank will not be able to send an appraiser inside either, so, do discuss it with the loan company or bank in detail before you dive into a sherriff's auction.

Please feel free to reach out to me at 330-285-4134 or ajaykmehta@russellrealty.com
Best Wishes,
Ajay Mehta. Russell Real Estate Services
0 votes Thank Flag Link Fri Aug 16, 2013
You put your 10% on the line, the property may not be to code, and it may not be able to obtain a mortgage, at which point you lose the 10% plus you have the Sheriff's office breathing down you neck for the rest of payment
0 votes Thank Flag Link Thu Jun 9, 2011
This would not be advisable... as at a sherrif sale, you could actually walk away from the event as the winning bid of a property that your lender may not want to write a loan for.

If you are interested in a property that you can get for cheap, and have financed... why not look at HUD owned listings that are available for bidding?

All the best,
Kieran
0 votes Thank Flag Link Thu Jun 9, 2011
Pre-approval would not replace the cash required at Sherrif's Auction as far as I am aware.
0 votes Thank Flag Link Thu Jun 9, 2011
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