About Truestee Sales

Question: What is a Trustee's Sale?

Answer: A Trustee's Sale is s public auction that is open to all bidders and the property is usually awarded to the highest bidder who meets all the criteria set by the Trustee.

Question: What or who is a Trustee?

Answer: A Trustee is an individual or company chosen to administer the assets of the beneficiary (i.e. the bank) and facilitate the foreclosure process.

Have you ever checked the classified section of your local newspaper? If you have, then you've probably seen several ads that are labeled "Sheriff's Sale", or something of the like. These are just one type of a sale that are also known as trustee sales.

A trustee sale always involves real estate. It doesn't matter if the property is a city block or eighty eight acres out in the country. Once it is seized, it's all treated pretty much the same as it falls under the same laws.

So, how does a trustee sale happen? In order to understand the entire process, we must start at the very beginning. You find a piece of land for sale that you would like to buy. The land can either be bare, or it can have a house already built on it. Or, maybe the land has a barn or other outbuilding on it; it doesn't matter. You find out how much the property is selling for, and then you pay a visit to your local bank, credit union, or other lending institution to get a loan for the money you need to buy the property. Once you sign the papers promising to repay the money you have borrowed, the loan is secured. Then your local bank, credit union, or other lender gives the money to the existing property owner. The lending institution gets the mortgage deed, and you take possession of the property. You also get a monthly mortgage payment. Usually, your real estate taxes are included in your monthly payment, but not always.

Now, if at any time during the life of the loan that you fall behind in your mortgage payments, then the lending institution has the right (as outlined in your mortgage loan agreement) to foreclose on your land. This means that, since you have broken your contract by failing to meet all of the monthly payments, then you must relinquish ownership of the property to the lender.

Your property can also be foreclosed by the county in which you live in if you fail to pay your property taxes too.
At this point, a trustee – usually a lawyer acting as the trustee on behalf of the lending institution, takes legal possession of the land. He or she then arranges to have a Trustee Sale on a certain date and time. The purpose of the sale is to sell the property in an effort to recoup the amount of your loan. As stated earlier, the sale is advertised in the classified section of the local newspaper.

Once the day of the trustee sale arrives, the land will be auctioned off to the highest bidder. Since this type of auction requires that the winning bidder pay cash for the property within 24hrs, not everyone is eligible to bid.
The opening bid is set by the bank through the trustee. The property will be sold exactly "as is" with no warranties or guarantees. After the auction and when winning bidder has paid for the property with cash, he or she then gets a deed from the trustee. If the opening bid is too high and there are no bids placed, then the property is bought back by the bank and becomes an REO (Real Estatate Owned) or a bank owned property.