As solicitor for various school districts and municipalities, our office is contacted by individuals who are interested in purchasing property at sheriff sale in Allegheny County. Anyone who has been to the Gold Room in the Allegheny County Courthouse on the first Monday of the month can attest to the fact that purchasing property at sheriff sale can be a confusing and overwhelming process. Although the information below should not be substituted for advice from an attorney, the following will provide general guidelines regarding the Allegheny County sheriff sale process.
First, the potential bidder must be aware that there are two types of sales, a mortgage foreclosure sale and a tax sale. In a mortgage foreclosure sale, the holder of a mortgage is taking back its collateral-the property-because loan payments have not been made by the owner. At the time of the sale, the mortgage holder is permitted to bid “costs and taxes” which total the amount of the legal costs to bring the property to sheriff sale and any tax claims filed by taxing bodies. This amount must be paid by the mortgage holder and results in the transfer of title from the owner to the mortgage holder. Be advised that this is not the amount due on the mortgage or the amount an interested bidder will pay if he or she purchases the property. The mortgage holder will bid up to the amount that it is owed on the loan plus other incidentals such at attorney fees, interest, etc. The final bid amount can sometimes be in the hundreds of thousands of dollars. Thus, more likely than not when it comes to mortgage foreclosure matters, an interested purchaser will not be getting a property for bottom dollar. To determine what the final bid amount will be, one can review the Default Judgment/Writ of Execution on the County Department of Court Records website to get an estimate of the actual amount due or approach the representative before the sale who will be able to advise as to the final bid amount of the mortgage holder.
In a tax sale, a taxing body is selling the property to obtain payment for delinquent real estate taxes or municipal claims. There are two different ways in which a property can be sold for taxes. In the first instance, a third party bidder will purchase the property for the upset price which is all costs, fees and taxes of the party bringing the sheriff sale action plus all other governmental entities who have filed a claim for outstanding delinquencies plus, the property will be subject and retain all other mortgages, liens, claims etc. that are on the property at the time of the same. For example, a mortgage on the property will not be extinguished and will need to be paid or the property can be subject to a foreclosure action. In the second instance, a free and clear sale, the third party bidder will purchase the property either for the upset price or for a lower minimum bid. In this second type of sale, all other mortgages, liens, claims, etc., are extinguished. The successful bidder is purchasing the property with a clear title.
If an interested purchaser wants to attend and bid on property, the following is practical information other interested bidders have found to be helpful:
- Sheriff sales are held monthly on the first Monday of the month unless the Monday falls on a holiday, then the sale is held on the first Tuesday of the month. The sheriff sale is located at the Allegheny County Courthouse (436 Grant Street, Pittsburgh, PA 15219) on the Fourth Floor in the Gold Room.
- For either a mortgage foreclosure sale or a tax sale, the successful bidder must pay at least ten percent (10%) of the winning bid at the time of the sale. The Sheriff accepts cashier’s checks, money orders or cash. No personal checks are accepted. Checks are made payable to the “Treasurer of Allegheny County.” The balance is due must be paid by that Friday of the same week before 10:00 am. If payment is not made by this deadline, the successful bidder forfeits the purchase of the property and the 10% down payment. The property is then re-listed for the sale the following month.
- Sheriff Sales are advertised in for three Mondays before the sale in the Pittsburgh Post-Gazette, the Pittsburgh Legal Journal and the Pittsburgh Tribune Review and bid lists can be found on the Allegheny County Sheriff’s Office website at www.sheriffalleghenycounty.com in the Real Estate Section.
- Caveat emptor or buyer beware. The mortgage holder and taxing bodies are simply looking to recover monies owed via the sheriff sale action. They are not real estate agents; cannot show an interested bidder the property; and do not know the condition of the properties being sold, It is advised that an interested purchaser obtain a title report which will set forth all mortgages, liens and legal issues associated with the property.
- Consider calling the delinquent tax collector or its legal counsel if a delinquent property has not been subject to a sheriff sale action. While some properties won’t be sold because the owners pay or are making payments on the delinquency, there are others that are not considered for sale because it is unlikely that they would sell at sheriff sale unless to a specific buyer. The taxing body may be willing to enter into an agreement to initiate the sheriff sale process and bring the property to sale.
- The pace and timing of the process leading up to the sheriff sale cannot be guaranteed. Unforeseen obstacles often slow the process. Including but not limited to issues that arise are: property owners that cannot be personally served by the sheriff resulting in the need to obtain and order of court for alternate service methods; property owners filing responses to the complaints/writs which must be addressed and require additional legal work; and additional parties needing to be to be joined as a party to the sheriff sale action.
- Neither the mortgage holder not the taxing body own the property. They are unable to simply sell the property to an interested bidder, even if payment of the outstanding balance is offered, and must undertake legal proceedings to properly transfer title from the current owner to the successful bidder.
- Sheriff sales are public auctions. Everyone has the opportunity to bid on property. Therefore, it is suggested that potential bidders keep a maximum bid in mind that they are willing to pay.
- Not all of the properties for sale are vacant or will become vacant after purchase. It will be the successful bidder’s responsibility to deal with these new “tenant.” Remember, the mortgage holder and the taxing bodies are selling properties to obtain payment on outstanding amounts due, not to provide you with a new home.
When it comes to sheriff sales and obtaining property, interested bidders win some and lose some but keeping this information in mind will make the overall process easier to comprehend and less stressful, especially for newcomers. Contact Jennifer Cerce for more information at 412.242.4400 or at firstname.lastname@example.org.