If you've been searching for below-market real estate deals, you've probably come across the term sheriff sale. These court-ordered auctions offer some of the most significant discounts available in real estate — but they come with unique risks, processes, and rules that differ dramatically from buying a home on the open market.
This guide explains everything: what a sheriff sale is, how the process works, what you need to participate, and how to evaluate whether a property is worth bidding on.
What Is a Sheriff Sale?
A sheriff sale is a public auction of real property ordered by a court and administered by the county sheriff's office. It is the final step in the judicial foreclosure process — the legal mechanism by which a mortgage lender recovers a debt when a borrower defaults on their loan.
The property is sold to the highest bidder. In most cases, the opening bid is set at or near the outstanding loan balance, unpaid interest, attorney's fees, and court costs. If no bidder exceeds the opening bid, the lender takes title to the property — this is called a bank takeover or REO (Real Estate Owned).
Sheriff Sale vs. Tax Sale
How the Foreclosure Process Works
The timeline from missed payment to auction varies by state but follows a consistent arc:
Missed Payments
Borrower falls behind — typically 90–120 days triggers the formal process.
Notice of Default
Lender files a formal notice. In judicial states, this initiates a lawsuit.
Lis Pendens Filed
A 'pending lawsuit' notice is recorded on the property title — a public warning.
Court Judgment
Judge enters a foreclosure judgment. The property is ordered sold.
Sale Scheduled
Sheriff's office schedules and advertises the auction — usually 4–8 weeks out.
Auction Day
Bidding opens at the court-set minimum. Highest bidder wins.
Deed Transfer
Winner pays in full, receives a Sheriff's Deed — sometimes weeks later.
Redemption Period
Some states allow the prior owner to reclaim the property by paying what's owed.
Judicial vs. Non-Judicial Foreclosure
Sheriff sales only occur in judicial foreclosure states — where the lender must go through the court system. The other method, non-judicial foreclosure, requires no court involvement and no sheriff sale.
Judicial States
Sheriff Sales Apply
PA, NJ, FL, OH, IN, SC, IL, NY, CT, DE, HI, KS, KY, LA, ME, NE, NM, ND, SD, VT, WI
Non-Judicial States
No Sheriff Sale
CA, TX, AZ, GA*, MI*, CO, OR, WA, NV, MN, VA*, MO*, and others
*Some states use both methods
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What Is Sold at a Sheriff Sale?
The vast majority of properties are residential — single-family homes, townhouses, condos, and small multi-family. Commercial properties, vacant land, and mobile homes also appear, though less frequently.
Properties run the full spectrum of condition. Some are well-maintained by owners who simply couldn't keep up with payments. Others have been vacant for years. You generally cannot inspect the interior before bidding — which is why due diligence before the auction is critical.
Single-Family
Most common
Townhouses
Common
Condos
Moderate
Multi-Family
Less common
Who Can Bid?
In most states, any adult member of the public can register and bid. No license required. That said, most counties have specific registration requirements:
Government-issued photo ID
Pre-registration with the sheriff's office (sometimes days in advance)
Proof of deposit funds — typically a cashier's check for 10% of the expected bid
Full payment due within 24–30 days of winning (varies by state)
What Does the Opening Bid Mean?
The opening bid (also called the upset price or minimum bid) is the minimum amount someone must bid. It typically represents:
Outstanding mortgage principal
Accrued interest
Late fees and penalties
Attorney's fees
Court costs and sheriff's fees
How to evaluate a bid
What Liens Survive a Sheriff Sale?
This is the most critical aspect of buying at a sheriff sale. Some liens are wiped out and others survive, becoming your responsibility as the new owner.
| Lien Type | Survives? | Notes |
|---|---|---|
| Senior mortgage (foreclosing) | Extinguished | This is the lien being satisfied |
| Junior mortgages | Extinguished | If properly named in the suit |
| Federal Tax Liens (IRS) | Survives | 120-day right of redemption |
| State Tax Liens | Varies | Depends on state law |
| Property Tax Arrears | Usually survives | Unpaid taxes follow the property |
| Municipal Liens | Usually survives | Code violations, water/sewer |
| HOA Liens | Varies | Often partially survives |
| Mechanics Liens | Generally extinguished | If junior to foreclosing lien |
Hidden costs can kill a deal
The Redemption Period
Several states grant prior owners a redemption period — a window after the sale during which they can reclaim the property by paying the full sale price plus interest and costs.
| State | Redemption Period |
|---|---|
| Michigan | 6 months (12 months if <2/3 owed) |
| New Jersey | 10 days |
| Ohio | None — title transfers promptly |
| Pennsylvania | None — deed issued quickly |
| Indiana | None after sheriff sale |
| Florida | 10-day upset period |
| South Carolina | 30 days |
Michigan investors: budget for carrying costs
Due Diligence Checklist
Smart investors follow a consistent checklist before placing a bid:
Pull the full title search — identify all liens, judgments, and encumbrances.
Check property tax status — are taxes current? How much is owed?
Research municipal liens — contact the municipality for open code violations, water/sewer arrears.
Check for IRS/federal tax liens — search the county recorder and federal tax lien database.
Drive the property — assess exterior condition, neighborhood, vacancy status.
Research comparable sales — what are similar properties selling for in the area?
Estimate repair costs — even a conservative estimate helps calibrate your maximum bid.
Calculate your MAO — ARV minus repairs minus profit minus closing costs.
Verify the sale is not postponed — sheriff sales are postponed frequently.
SheriffIQ does the heavy lifting
Common Mistakes First-Time Bidders Make
Bidding without running a title search first
Ignoring the redemption period — especially in Michigan
Underestimating repair costs on a property you've never entered
Not understanding that full payment is typically due within 30 days
Overbidding in competitive situations — emotion drives bad math
Failing to verify the auction hasn't been postponed
Sheriff Sale vs. Tax Sale vs. Bank REO
| Feature | Sheriff Sale | Tax Sale | Bank REO |
|---|---|---|---|
| Trigger | Mortgage default | Unpaid property taxes | Lender took title |
| Who runs it | County sheriff | County treasurer | Bank or servicer |
| Competition | Moderate-high | Moderate | High (MLS listed) |
| Title risk | High — liens possible | Very high | Low — title insurance |
| Inspection | Rarely | Rarely | Usually yes |
| Redemption risk | State-dependent | High (1–3 years) | None |
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