I often have people ask me about purchasing a home at a trustee’s sale, usually called a sheriff’s sale in Utah. In many cases they’ve been told by a friend or relative about the fabulous bargains at such sales. And these days, there are plenty of properties being sold at auction; 3720, and counting, have been scheduled in Utah so far this year. The first thing I tell these buyers is that the bank has a minimum bid that they’re willing to accept, and often their bottom line turns out to be more than the property is worth. Beyond that, there are other factors to consider.
- Just because a property is advertised to be sold on a certain date, doesn’t mean it will be available. Circumstances may have changed. The owner may have reinstated the loan or the bank may have approved a short sale.
- Opportunity to conduct a property inspection can be extremely limited. In many cases, you have no access because the home is still occupied by the owners or tenants. This is no small issue since many of these homes are not in prime condtion.
- After the sale, the occupants may have to be evicted.
- If there are any liens on the property, you can be held responsible.
- A clear title is not guaranteed.
- Investors keep a close eye on these properties. They know which ones are good buys. If yours is the only bid, beware.
If these warnings don’t discourage you, proceed with caution. Do your detective work so you can be a savvy buyer.