The Walden Effect: Farming, simple living, permaculture, and invention.

Buying a homestead from a sheriff's sale

Property boundaries

The Homestead That Got Away had been sold less than a year ago at a sheriff's sale...which got me wondering if I should peruse those listings in addition to craigslist and real estate sites. Sure enough, I found a potential homestead on a county website in short order. But was it worth it?

Title searchAfter intensive research, I found out why the average homebuyer probably shouldn't stalk sheriff's sales. These auctions are a way for a bank to recoup their investment after a foreclosure...but lenders don't let properties go for a song. Instead, in 80% of sales, the bank buys the property back rather than losing money on the endeavor.

The next hurdle to be aware of is additional mortgages. This was the point that killed our interest in The Homestead We Threw Back, since an online title search suggested that the mortgage resulting in the foreclosure wasn't the only lien against the property. If we'd bought that property without a title search, we would have owned the the obligation to repay the primary loan. Suddenly the selling price got a lot higher than we thought!

Of course, it can also be tough to thoroughly research foreclosed properties since the current owner might not be thrilled about you tromping across their land. Given the the high risk involved in buying a pig in a poke, we're probably going to steer clear of this source of bargain real estate for now...although we will check the bank sites in a month or two since foreclosed properties often end up there for less than they went for at the sheriff's auction.

Back to the drawing board!

Anna Hess's books
Want more in-depth information? Browse through our books.

Or explore more posts by date or by subject.

About us: Anna Hess and Mark Hamilton spent over a decade living self-sufficiently in the mountains of Virginia before moving north to start over from scratch in the foothills of Ohio. They've experimented with permaculture, no-till gardening, trailersteading, home-based microbusinesses and much more, writing about their adventures in both blogs and books.

Want to be notified when new comments are posted on this page? Click on the RSS button after you add a comment to subscribe to the comment feed, or simply check the box beside "email replies to me" while writing your comment.

What are your thoughts on using a realtor? It costs you nothing and could alert you to properties before they are on the market, plus the realtor could go look at a property on your behalf and send you more pics or a video. I've found it invaluable to have a realtor for out of area purchases several times. The best part for us has been having the realtor manage all the inspections and estimates of repairs needed (besides managing the title search and the deal).
Comment by Jennifer Mon Jul 10 08:51:59 2017

I worked for a few years with a real estate attorney in TN and learned quite a bit out foreclosures and Sheriff's sales. I would caution you about buying property from Sheriff's sales which are being sold for back taxes. In TN (I don't know about other states but it's probably true for them as well), a homeowner whose property is being sold for back taxes has one year after the sale to pay the county for the back taxes which will make the sale to anyone else void.

You might be able to get a piece of property direct from an owner, but I would strongly recommend you get a title search done by a professional, NOT just online because many times there are niggling little details that are not noted in those online searches, like easements, oil and mineral rights, where the property lines really are (mistakes in land descriptions happen!) etc. which will only show up if you actually look at the deeds in question.

Comment by Nayan Mon Jul 10 09:29:08 2017
Getting the legal docs in order is an absolute must! My wife's aunt put a deposit down on a lot (house had burned down suspiciously) adjacent their driveway in SW VA. They wanted the lot to keep the "riff raff" out as they said, and found on a title search that the woman who claimed to own it really DIDN'T. And she had also "sold" the property to someone else! They have a judgement in court to recover the $500 deposit, which I doubt they will ever see. :( Be careful out there!
Comment by Eric Mon Jul 10 18:29:17 2017

profile counter myspace

Powered by Branchable Wiki Hosting.

Required disclosures:

As an Amazon Associate, I earn a few pennies every time you buy something using one of my affiliate links. Don't worry, though --- I only recommend products I thoroughly stand behind!

Also, this site has Google ads on it. Third party vendors, including Google, use cookies to serve ads based on a user's prior visits to a website. Google's use of advertising cookies enables it and its partners to serve ads to users based on their visit to various sites. You can opt out of personalized advertising by visiting this site.