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Sheriff’s Real Estate Auctions* An Adobe printable version

Presented bySheriff Marlin N. Gusman

Orleans Parish Sheriff’s OfficeSHERIFF’S SALES DISCLAIMER**This Sheriff’s Real Estate Auctions is forinformation purposes only, and does not constitutelegal advice. Images of h0mes are for illustrationpurposes only.

Sheriff’s Auction Date: Every Thursday (except legal holidays) Time: Noon Location: Civil District Court421 Loyola Ave.

Types of Sheriff’s Sales Seizure Sales Court-Ordered Sales Government Sales

Types of Seizures 1. Executory Process – Writ of Seizure and Sale A “Quick Take” legal process for defaulted mortgages. 2. Judgment – Writ of FieriFacias, or “FiFa” A court grants a money judgmentto plaintiff.Sometimes a mortgage is involved.

What A Seizure Sale Does Transfers debtor’s ownership interest. If debtor has a good title, you have a good title! Wipes out debtor’s inferior liens. Pays off debtor’s superior liens. No superior liens in city cases.

What A Seizure Sale Doesn’t Do Does not ensure clear title. Does not have a warranty as to condition ofproperty. So, view the property first! All city sales will be blightedproperties, requiring cleanup,repair or demolition.

Why Seizures on Mortgages are Safer for Bidding Failed mortgages generally have title insurance. Bank or mortgage company is usually the plaintiff inseizure sales. Read the title of the case.

Why Title Matters in Seizure Sales Lender’s (Plaintiff) title research is a good indicatortitle is good. Exception: There is no lender in city sales.

Example 1: Read the Title of the Case

The Sheriff’s Role in Seizure Sales Sheriff obtains mortgage and conveyance certificatesto detect judgments, mortgages, liens, etc., whichoccurred while debtor owned the property. Excludes issues that occurred before debtor owned property. Sheriff pays out of auction proceeds any superiorliens and taxes; and cancels liens inferior to theforeclosed mortgage. Sheriff does not ensure clear title.

Due Diligence Definition: Due diligence is the care used to review a property and itstitle ownership before bidding. Due diligence varies from person to person Minimum due diligence requires bidders not topurchase a property at auction without seeingit “in person.”

Due Diligence: View the Property FirstPICTURE FROM STREET SIDEA CLOSER LOOK

Due Diligence: Rules of Thumb Never, Never, Never buy merely from viewing thepictures. Pictures may be wrong or outdated. Buyers highest bid may dictate degree of duediligence. Bid more More due diligence.Bid less Less due diligence.

Sheriff’s Sales In Sheriff’s Sales, a deed transferring title will begiven to the successful bidder upon payment of thefull auction bid.

Bidding Process at Sheriff’s Sales Sheriff’s Auction General Rules: For initial 10% deposit: Cash CertifiedCheck, Cashier’s Check, Or, Money Order Make Certified Check, Cashier’s Check, or Money Order, payable to yourself. Make bids in the increments of 100.00 or more.No personal checks, corporate checks, or credit cards will be accepted.Balance due within 30 days.NOTE: CASH WILL NOT BE ACCEPTED FOR BALANCE DUE.

Bidding Process at Sheriff’s Sales How much money do I bring to the Sheriff’s auction? Bring ten percent (10%) of what you are prepared to bid.No change will be given if your check is more than ten percent(10%). Who should I make the cashier’s check, certified check,or money order to? Make the Certified Check, Cashier’s Check, or Money Order payableto yourself. If you are the successful bidder, you can endorse thecheck to the Sheriff’s Office. No change will be given if your check is higher than ten percent(10%) required for deposit.

Bidding at Sheriff’s Sales The law allows a creditor to “credit bid” (not put upa 10% deposit), because creditor already has aninterest in the property. A creditor has to right to “credit bid” as long as theamount of the bid doesnot exceed what is owedto the creditor.

Bidding at a Sheriff’s Sale Auctioneer will occasionally make specialannouncements. Special announcements serve aswarning to the public: Example 1: Announcements – regardingtaxes, adjudications, etc.Example 2: Condominium Unit onlybeing sold, not the entire building.

Example 1: Special Announcement –“Redeemable Tax Sale”

Example 2: Special Announcement –“Condominium Unit only being sold, not entire building”

Bidding at Sheriff’s Sales What does a sale “with appraisal” mean? Creditor reserves right to pursue any deficiencies in amountreceived from debtor. When the sale is “with appraisal,” the opening bidmust be 2/3 of the appraised value. Appraised Value 100,000 100,000 x 2/3 66,666.67Opening Bid 66, 666.67

Bidding at Sheriff’s Sales When the sale is “without appraisal,” the opening bid is theSheriff’s costs plus all superior claims and commission.Without Appraisal, Sheriff’s Costs 3,000* Superior Claims 20,000* Sheriff’s Costs and Superior Claims: 3,000 20,000 23,000 Commission:3% * 23,000 690 Opening Bid: 23,000 690 23,690 * Estimate

Sheriff’s Sales and Exterior Appraisals An “exterior appraisal” is completed on each foreclosed property that isbeing sold “with appraisal.” “Exterior appraisals” must be received at least 48 hours in advance ofthe auction and no more than 90 days before the auction. Plaintiff and Defendant have the legal right to submit an appraisal ofthe property. If parties do not submit an appraisal, the Sheriff will appoint anindependent appraiser to make “an exterior only appraisal of theproperty.”

What is Writ of Fieri Facias?Definition: a writ authorizing the sheriff to obtain satisfactionof a judgment in debt or damages from the goods and chattels ofthe defendant. Writ of Fieri Facias,or FiFa are sometimessecured by a mortgage.

Court Ordered Sales, or Partition Sales A sale of real estate in which the Sheriff is ordered bythe court to sell that property that is co-owned by twoor more individuals (succession, divorces, familymembers, or other court orders) or entities (business,partnership, etc.). More frequently now, tax sale properties seeking toquiet title. In a partition sale, a joint property is sold and proceedsfrom the sales will be divided among co-owners.

City Blighted Property Sales Blight is a legal determination pursuant to R.S.13:2575. Code Enforcement and HearingsBureau, (504) 658-5050 City can seize and sell propertypursuant to R.S. 13:2575(A)(6). City granted first lien privilegepursuant to R.S. 9:4821(1).

City Blighted Property Sales No redemption period as in city taxes. Blighted property sales are Seizure Sales under Writof Fieri Facias, but are not foreclosures: No mortgage is foreclosed upon.No proper title search performedby mortgage lender.No “borrowed” title search forbuyer to rely on. Seizure based onjudgment.

Bidding on City Blighted Property Opening bid 2/3 of appraised value, unless 2nd sale.10% down.For initial 10% deposit: Cash CertifiedCheck, Cashier’s Check, Or, Money Order Make Certified Check, Cashier’s Check, or Money Order, payable toyourself. No personal checks. No corporate checks. No credit cards.Balance due within 30 days.

Bidding on City Blighted Property 2nd Sale No opening bid No bid, No sale. Re-offered at “second sale” within 2 to 3 months atcost.

Closing the Deal Items needed to complete the sale: For initial 10% deposit: CashCertified Check,Cashier’s Check,Or, Money OrderNo personal checks, corporate checks, or credit cards for initial 10% deposit, please.Successful bidder’s information. Name and /or Business NameAddressPhone NumberMarital StatusThe name the deed is to be vested.Social Security Number or Tax ID Numbero Personal checks or corporate checks may be accepted to pay the finalbalance.o However preparation of the deed will not start until the personal check hascleared the bank. Usually within fourteen (14) days.

Closing the Deal When paying the balance. The Sheriff will not accept cash.You must bring a check made payable to the Sheriff’s office forthe remaining balance.This payment may be in the form of a certified check, cashier’scheck, or money order. Personal checks or corporate checksare accepted, but will delay the preparation of the deed. Thedeed will not be prepared until the check has cleared the bank.Usually within fourteen (14) days.oNO CASH IS ACCEPTED.

Summary of Sheriff’s SalesSeizure SalesCourt-OrderedSalesGovernmentSalesWrit of Seizure, alwayssecured by mortgage.Partition Sales(Terms vary)City tax sales 100%ownershipSales of State Lands(Terms vary)Writ of Fieri Facias,sometimes secured bymortgage.City Sales (based on ajudgment)Public Sales out ofsuccessions, divorces,and other court casesReleases inferiorjudgments and liensDoes not releaseinferior judgmentsDoes not releaseinferior judgments

News Paper Advertisements Orleans Parish Sheriff’s “Real Estate Ads” are ran inthe Louisiana Weekly. And, in the Times Picayune - New Orleans AdvocateWednesday Edition.

Advice Tips from Third Party Purchasers The following Information on the next several slidesare advice tips from Third Party Purchasers,provided by Johnathan Wallick and Ron Ward, guestspeakers at the October 29, 2019, Sheriff’s RealEstate Seminar. This is information given with their permission.

Advice Tips from Third Party Purchasers Bidders are only in competition with the people whoare present at the auction. The auctions usually have less than 10 active bidderson most properties. On the “Open” market, hot or discounted propertiesusually have multiple offers and the process isshrouded in secrecy. The auction process is transparent and open Highest bidder wins! Often you can get properties at a highlydiscounted price

Advice Tips from Third Party Purchasers The bidding starts at 2/3rd’s of the appraisal value orat cost. At the beginning of each sale, pay close attention tothe auctioneer’s instructions and descriptions of theproperties encumbrances, liens, and other potentialtitle issues. Only 10% down and 30 days to pay the balance. A new group of properties are available every week.

Advice Tips from Third Party Purchasers Things you should absolutely do before bidding on aproperty (your due diligence). Visit the propertyVerify the address (do not rely on the photo listed)If the property is on the market, make an appointment to visitit and inspect the interior.Have a good idea of what the property is worth to youKnow what your max bid is before the auction startsHave certified funds available, checks in 2,500 or 5Kincrements.o Pay the balance as soon as possible.

Advice Tips from Third Party Purchasers Make certain you can pay the balance in 30 days or less.Goals – short term and long term.Get legal advice.Insurance, how to get renovated, unexpected costs, theft,vandalism, licensed contractor, permits.Familiarize yourself with eviction laws, owner and tenantrights.Remember the deed has to be recorded before ownership.If there is someone living in the house after sale, they havecertain tenant rights.

Advice Tips from Third Party Purchasers Tips on researching a property up for auction Visit the property. Visit during day and night hours. Talk toneighbors to get information on the history of the property.If the property is on the market, make an appointment to viewthe property, inside and outside.Look up the property on the tax assessors website.Visit NOLA.gov to see if any building permits or codeviolations exists.Talk to real estate agents and visit real estate websites to getinformation on the values in the area.o If the property is occupied, prepared for the time andexpense of an eviction.

Advice Tips from Third Party Purchasers Remember, purchasing a property at the auction canbe very rewarding, but bidding comes with a risk.Understand how much risk you can tolerate beforebidding on a property. Also, the more properties you identify that fit yourinvestment criteria, the more likely you will acquire aproperty.

Orleans Parish Sheriff’s OfficeTAX SALES