Because seized property auctions are frequently associated with both a foreclosure by judicial sale and a judicial lien, it is helpful to discuss those concepts before actually discussing seized property auctions.
A foreclosure by judicial sale is the sale of a mortgaged property resulting from the intervention of a court. Generally speaking, foreclosure by judicial sale is ordered when there is some dispute in which the property debt cannot be resolved. Foreclosure by judicial sale may also occur if the borrower is insolvent, and as such cannot afford to continue making mortgage payments. The proceeds resulting from a judicial sale will be paid towards the original mortgage, and if there is any profit remaining, any other lien holders and/or second mortgages may be paid from the sale. If there are any profits remaining after all debts have been paid, the borrower may receive those proceeds.
Liens are a type of security interest that is placed on an item or property in order to secure a debt or a loan, most commonly a home or automobile loan. Under specific circumstances, a lender may take a lien and sell it when the borrower is unable to make their scheduled payments. Liens are generally a formal document that is signed by the creditor, to whom money is owed; or by the debtor, who is agreeing to make all due payments.
A lien is intended to provide security to the person who is taking out a loan in order to cover their debt and obligations. For the creditor, a lien provides a type of extra leverage against the debtor in order to ensure that payments are actually made on the loan.
Depending on the specifics of a situation, there are different types of liens that may be obtained. Generally speaking, liens result from a contractual agreement between the creditor and the debtor. Before a lien may be placed on the property, the creditor must go to court and present evidence of the unpaid debt.
A judicial lien is most commonly obtained in association with the final judgment that is issued in a lawsuit between the debtor and creditor. Once the judicial lien has been certified by the court, the debtor is required to forfeit their property, which may then be subject to a judicial sale.
What Is A Seized Property Auction?
A seized property auction refers to the sale of property that has been seized by either the state or local government. The sale of the property is overseen by state or municipal government officials, and generally takes place where the property itself is isolated. To reiterate, a seized property auction generally results from foreclosure by judicial sale or judicial lien; however, it can also involve other laws, such as a criminal drug case.
The process begins when the government takes over the title to land, and sells it to the highest bidder. Bids may be submitted by depositing a certain amount of money with the government agency responsible for selling the property; this amount is refundable if the person who placed the deposit does not win the bid. Generally speaking, the bidder must be physically present at the sale, although written bids are sometimes allowed under specific circumstances.
Many purchasers prefer to buy property through seized property auctions, largely because property is often sold at prices which are considerably lower than normal. Tax deed sales are similar to auctions, and will be further discussed below.
As with any property sale, the buyer should always make a thorough inspection prior to purchasing the property or placing a bid on the property. In most jurisdictions, the general rule is “buyer beware.” What this means is that it is the buyer’s responsibility to do their own research of the property, which also holds true for property that is being sold during a government auction.
Additionally, it is important to note that no broker is required to participate in a government auction. However, the government will not provide financing; as such, it is always best to work with both a broker and a lawyer for any major transactions.
What Is A Tax Deed Sale?
Tax deed sales refer to a concept of real property law, in which the deed to a specific property is sold to the highest bidder at a public auction. The tax deed itself is a type of legal document transferring ownership of the property to a new buyer. The purpose of a tax deed sale is so that the county can recoup the amount of money that a homeowner has failed to pay on their property taxes. As such, the state or local government will generally set the minimum price of the property.
An example of this would be if your neighbor stops paying taxes on their property. This will make them vulnerable to tax foreclosure, which means that the local government can intervene and put the house up for sale at a public auction. Once the house is sold to the highest bidder, the buyer will receive a tax deed as proof that they now own your neighbor’s house (or, the tax deed property). A tax deed property is simply the property that is sold via a tax deed.
It is important to note that a tax deed sale is not the same thing as a tax lien. A tax deed sale is attached to a tax deed property, while a tax lien only involves paying back taxes and interests on the property. The delinquent taxpayer still owns their property for a certain amount of time until they either pay off their debts in order to retain ownership, or fail to do so and lose the house to a foreclosure action.
Finally, it is important to note that not every state recognizes tax deed sales. Some states may only permit tax lien arrangements, while other states may only allow for tax deed sales. However, there are some counties that recognize both terms. In order to work with the most relevant information, you will need to review the laws of your jurisdiction in order to determine which one applies to your specific property under such circumstances.
What If I Have A Dispute Over Seized Property?
Seized property disputes can be associated with many different causes. An example of this would be how financing and mortgage issues can still arise because the buyer still must find their own financing for the home purchase. Less common issues are associated with title defects, and other title concerns.
Because the sale is generally due to a judicial intervention, quiet title proceedings are not frequently involved. Owning the title to a property means that you are the property’s rightful owner. As such, you may live on or sell the property as you wish. However, disputes regarding who actually owns the title as well as the property itself frequently arise. The person who is having their ownership rights disputed may need to take legal action in order to end the dispute, and reestablish their right to the title. This would be referred to as an action to “quiet title.”
However, a quiet title proceeding may be necessary in instances in which the buyer discovers a defect with the title.
Do I Need An Attorney For Seized Property Auctions?
If you wish to purchase property through a seized property auction, you should consider working with an experienced and local foreclosure lawyer. An attorney can help you understand your state’s laws regarding the matter, and how you should go about purchasing a seized property. Should any legal issues arise, your foreclosure attorney will also be able to represent you in court, as needed.