One of the more interesting ways to buy real estate is through tax auctions. When a party buys a property through a tax auction or foreclosure, they receive a special type of deed known as a “Sheriff’s Deed.” A sheriff’s deed is a legal instrument that is transferred when a property is sold as a result of a foreclosure. The purpose of this article is to provide information on Sheriff’s Deeds so that persons buying real estate at a tax auction can be better informed on the nature of exactly what they are purchasing.
What is the difference between a judicial and a non-judicial foreclosure?
Most foreclosure sales take place outside of judicial proceedings. This is because many mortgage agreements contain a “power of sale” clause. A “power of sale” clause gives the lender the ability to sell the mortgaged property to satisfy the borrower’s debt if the borrower fails to make their contractual payments. This nonjudicial foreclosure process, however, must comply with strict statutory requirements regarding the timeline of a sale and notice procedures once the borrower defaults. (Civil Code § 2924.)