What Happens When a Home Does Not Sell After a Sheriff’s Auction?

As the coronavirus pandemic continues, many Americans have been struggling to pay their mortgages and other bills. When a property has unpaid debts associated with it, the city of Philadelphia can sell the property in a Sheriff’s sale, which is a type of auction. The money that comes from the sale goes to pay for the unpaid debt, such as delinquent property taxes for other municipal liens. The goal of a Sheriff’s sale in Philadelphia is to recover enough money to clear the debt and liens on the property, so the new owner owns the title free and clear. What happens when a home does not sell after a sheriff’s auction?

What Triggers a Sheriff’s Sale?

The following types of debts can trigger a sheriff’s auction in Philadelphia — unpaid tax bills, an unpaid mortgage, or any other lien on the property. Sheriff sales occur when the debt or lien is at least three years delinquent. However, the sheriff’s department does not automatically sell properties with delinquencies. They look at multiple factors to decide when to sell a property through a Sheriff’s sale. These factors include the length of the delinquency, the amount of debt, and whether the owner has tried to enter into a repayment plan. They also consider the value of the property and whether a Sheriff’s sale is worth it.

The city of Philadelphia isn’t the only agency that determines which properties will be sold in a Sheriff’s sale. Philadelphia also works with its collection agencies, including GRB and Linebarger, along with the court system to decide which properties to sell. Individuals can request that tax-delinquent properties go to a Sheriff’s sale by contacting the entity that owns the tax liens.

The Sheriff’s Auction Process in Philadelphia 

The Philadelphia Sheriff Department holds a Judicial Foreclosure Sale on the first Tuesday of every month. Philadelphia also holds four different tax sales each month and one sale every quarter. The court will assign every property and identification number. These sales are open to the public, and anyone who is qualified can bid for the property. In most cases, people who put in bids for the property at Sheriff’s sale are bidding against some type of bank representation. 

The foreclosing entity, such as the tax authority, HOA, or lender, can regain title to the home through a Sheriff’s sale. In many cases, the bank will send an attorney to bid on the home. Sometimes the bank will win the auction, make repairs on the home, and then list it for sale again. Under Pennsylvania law, the bidder must be able to put down at least 10% of the property’s purchase price immediately on the day of the auction. The buyer only needs to have a check and a driver’s license. They must pay the additional 90% within 20 days of the auction, giving them time to get their funds in order and transfer the money.

When a Home Does Not Sell, it Becomes an ERO Property

In some cases, the home will not sell during the sheriff’s auction. When a home does not sell in a Sheriff’s sale, it will become real-estate owned (REO property). The bank or other lender will take possession of the home until they can sell it or auction off the property themselves. 

Why You Need a Philadelphia Mortgage Foreclosure Lawyer 

Are you concerned about your property being sold at a Sheriff’s auction? If so, you need to consult with an experienced Philadelphia foreclosure lawyer. The best time to speak to a lawyer is before the foreclosure process begins. Lenders can begin the foreclosure process when you are over 60 days behind on your mortgage payments. You have the opportunity to reinstate your ownership by paying all the missed payments. However, unless you can pay all of the back payments in one lump sum, your lender may continue with the foreclosure process.

The next step of the foreclosure process involves filing a Complaint in Mortgage Foreclosure against you. Many of our clients believe that there is nothing they can do at this point to be evicted from their home after the foreclosure. However, our attorneys can use several different legal strategies to defend our clients who are facing foreclosure.

Owner’s Rights of Redemption After a Tax Delinquent Sale

If someone has purchased your property after a tax delinquent sale, you still have some rights. If you are the owner of the record, you can go to court and seek permission to recover your property. You will need to pay back all of the taxes you owe and pay back the winning bidder’s money. This process is called the Right of Redemption. Only certain property owners can use the Right of Redemption. To use the Right of Redemption, you must show that the owner occupied the property 90 days before the Sheriff’s sale. When the property has been abandoned or unoccupied, there is no Right of Redemption. 

Contact a Philadelphia Foreclosure Lawyer Today

When you work with the experienced lawyers at the Law Offices of Cibik Law, you can rest assured that we will thoroughly investigate your case. We will develop an effective strategy that could involve finding irregularities or errors in the mortgage documents, the bank disclosures, or the notes. We may be able to delay the foreclosure process by making the lenders prove their case. 

We may be able to help you obtain a loan modification, a deed-in-lieu, a short sale, or help you with a Chapter 13 Bankruptcy to stop the foreclosure process. Contact Law Offices of Cibik Law today to schedule your initial consultation. We will review your case and provide you with an overview of your legal options.