I am interested in bidding on a parcel at an upcoming Sheriff Sale. I have searched records & see there are/were judgement liens, tax liens, and IRS liens on the owners. I am not clear if these have been wiped out since the house is scheduled for SS. The court docket states a “prayer amount,” without understanding the terminology, does this have any significance for me as a bidder and does this sound like a risky parcel to bid on.
The “prayer amount” (a Freudian double entendre if ever there was one) is the demand for a specific dollar amount of damages. You didn’t mention the state wherein the Sheriff Sale will take place? … but it sounds like a judicial foreclosure state (where the lender must go to court to foreclosure). Most states follow similar rules, in that any debt “senior to” the lien/loan you acquire at the auction (Sheriff Sale in this case), must be paid off to gain clear title. If you fail to pay off senior debt, you run the risk of losing the property to a subsequent foreclosure proceeding. Simply put … check carefully the *recording date* of any loan you’re intending to buy at auction and make sure you can afford to pay off any liens/loans/judgments that were *recorded before* (and hence are senior to) the loan you are buying. Whether senior or not, the IRS also has a 120 day right to redeem a property (if there is an IRS lien recorded). There are several threads on this forum which discuss IRS liens in depth. In most cases, the IRS does NOT opt to redeem, but you may have to wait 120+ days before you can gain clear title. . Answered by idannyb
Wed Aug 1st 2012 at 10:52am
I really appreciate your response & information. The state is Ohio. Would you mind pointing me in the right direction of where I would look to find the “recording date of the loan for sale at auction.” I have had a title search and the results have been forwarded to me, although, from everything I have read, I still can’t seem to determine if the liens/loans/judgments are payed & the title clear. I will mention one thing that was clear. The senior loan holder is also the junior loan holder and it stated in the Foreclosure court docket that they (Plaintiff) would forgive and not go after the junior loan amount if there was a date set for Sheriff Sale - which there is. This happens to be a home that I was attempting to purchase via Short Sale and thinking our offer (submitted over 90 days ago) was still being considered for approval, I inadvertently found out (through the wonderful INFONET, aka internet) that the same home had a date filed for Sheriff Sale. By the way, I found this out the same day I received a forwarded email by the listing agent from the Negotiator stating he was confident that everything was in place, set to be in front of the Investor, & hoping for approval by the end of the month. That was July 16th. The court docket stated on July 3 the home was sent to sheriff for sale and on July 16th, the date was set. By the way, the “appraisal” amount on the auction notice, is the exact amount of our offer. I don’t know what significance that has, I just found this interesting. Things that make you go Hmmmm… One last thing, is it ever “ok” to contact the Plaintiff’s attorney listed on the Auction notice? If so, what would you recommend to say or not to say. Thank you again for your time & expertise. . Sandra Thu Aug 2nd 2012 at 10:48am