What is a Kosciusko County Sheriff Sale?

The Kosciusko County Sheriff sale is a public auction of foreclosed properties providing consumers with an opportunity to acquire real estate at deep discounts compared to the open market. Sheriff sales are conducted after foreclosure hearings have concluded and the property’s deed has been awarded to a lender. This type of sale occurs because the previous property owner was severely delinquent on payments and eventually defaulted on their mortgage.

After reading this blog post you'll be able to answer the following questions:

• What types of property are available for sale?
• When and where are Kosciusko County Sheriff sales held?
• Is there a list of foreclosed properties I can view prior to the sale?
• Can you finance purchases made at a Kosciusko County Sheriff sale?
• What happens when one of the properties on the list doesn't sell at auction?
• What are some of the risks I should consider?

What Types of Properties are Available?

The type of real estate sold at a Kosciusko County Sheriff sale differs from month to month. While the majority of available properties will be single-family dwellings, it’s not unusual to see multi-family, commercial, mixed-use, and vacant land become available at the auction. As far as condition is concerned, sheriff sale foreclosures range anywhere from “nearly brand new” to “barely standing”… and everything in-between.

When and Where are Kosciusko County Sheriff Sales Held?

Here in Kosciusko County, sheriff sales are held at 10am on the 4th Tuesday of every month in the lobby of the Sheriff’s Department. These offices are located at 221 W Main Street, Warsaw. Be sure to show up early because the sale starts EXACTLY at 10am and the sale moves quickly.

Is There a List of Foreclosed Properties I Can View Before the Sale?

There is. Every month the Kosciusko County Sheriff's Department provides a spreadsheet detailing all foreclosed properties scheduled for auction the following month. This document contains valuable property information including: cause number, defendant name, plaintiff name, property address, attorney name, judgment amount, minimum bid, and property status. This spreadsheet is updated frequently however you should be aware that often times a property’s status will change from “active” to “cancelled” because the defendant has either a) paid the delinquent amount or b) was able to make other arrangements with the foreclosing institution to delay the proceedings. You can find the spreadsheet here.

Can I Finance My Purchase at a Kosciusko County Sheriff Sale?

No. All Kosciusko County sheriff sale foreclosures must be paid for with cash in the form of a cashier’s check. The winning bidder must present this check to the Kosciusko County Sheriff’s office NO LATER than 3pm the SAME DAY as the sale. As a potential buyer, it’s important to make sure you’ve made all the necessary arrangements with your banking institution to ensure this is possible. Failure to pay the total balance due via cashier’s check by 3pm on the day of the sale will result in forfeiture of all rights to the property and a $200 administrative charge.

What Happens if a Home Doesn’t Sell?

When attending a Kosciusko County sheriff sale you will notice that each foreclosed property has two dollar amounts associated with it, a judgment amount and a minimum bid (more commonly known as the “upset price.”) Contrary to popular belief, the minimum bid IS NOT always lower than the judgment amount and depends heavily on how much of a loss the plaintiff (bank) is willing to incur. Should it happen that no one places a bid AT or ABOVE any properties upset bid, said property rights return back to the bank.

What are Some the Possible Risks? 

The financial incentives associated with purchasing a property at a Kosciusko County sheriff sale are obvious and attractive. Who doesn’t love the idea of acquiring real estate at a deep discount and making heaps of money? I mean… all those people on HGTV make flipping foreclosed homes look quick and painless, right? Unfortunately, what you don’t often see or hear about are the potential pitfalls associated with purchasing sheriff sale foreclosures. This process involves REAL RISK and if you don’t exercise proper due diligence you can (and probably WILL) lose A LOT of money. Here are just a few of things you need to take into consideration when purchasing property at a Kosciusko County sheriff sale. (*NOTE: This is not a comprehensive list!*) 

• YOU ARE PURCHASING “SIGHT UNSEEN.” You will not have access to the property prior to the sale so you have no way of knowing the condition of the structure prior to purchase. Sure, you can drive around the building and possibly peek in the windows (although this is technically trespassing so we do not encourage the activity) but you will still have very little idea as to the condition of the interior until you receive the keys. Did a pipe break resulting in 4 feet of standing water in the basement? Did the disgruntled previous owner rip every inch of copper tubing out of the walls? Maybe… maybe not.
• THERE COULD POSSIBLY BE OTHER LIENS ON THE TITLE. The sheriff sale you are participating in only releases the property from encumbrances associated with the lender in “first lien position.” Did the previous owner have any additional mortgages? Are there legal judgments associated with the property? You should be able to answer all these questions before you even consider placing a bid. Any local title company can perform a “preliminary title search” on the property and provide you with this information for a small fee.
• YOU MAY HAVE UNWANTED HOUSE GUESTS. Picture this: you’re the winning bidder on a foreclosure you’ve had your eye on for several months. You go to the sheriff’s department and exchange a cashier’s check for keys to the front door of your new investment. You can’t wait to get inside and see exactly what you’ve purchased so you drive straight to the property to take a look. But as you approach the home you notice several cars in the driveway and a guy grilling hamburgers on the porch… Guess what… the previous residents have decided they’re in no hurry to vacate the premises. Now what? Unfortunately, this scenario actually occurs more often than you might think. So what can you do? [Option 1] BRIBERY: Think “cash for keys.” Offer them money in exchange for exiting the property within a certain amount of time. I know this sounds ridiculous seeing as it’s YOUR property but this is often the best method to ensure your home is delivered in "good" condition. [Option 2] EMERGENCY EVICTION: In the scenario described above, there's the possibility a Kosciusko County Judge will award you an “emergency eviction”. In order for this to take place you must file suit with the County Clerk’s office and pay a $125 fee.

As you can see, buying a foreclosed property at a Kosciusko County Sheriff sale can be extremely lucrative but it can also be extremely risky. Make sure to DO YOUR RESEARCH on the front side and use caution to avoid spending more money that you can realistically afford to lose. Use your favorite Kosciusko County Realtor and Beacon GIS to provide you with as much information about the property as possible.

Have more questions about the sheriff sale process? Give Jason Patton a call at (800) 218-8195. In addition to overseeing all the marketing and business development affairs at The Julie Hall Group, Jason is also a savvy real estate investor. Good luck!