Yuriy 0:00

Hi everyone. Welcome back to the Phil Landlord Guy. I'm your host, Yuriy Skripnichenko, the guy with Impossible last name. Just think of me as the Philly Landlord guy. I am a licensed real estate broker and certified property manager here in Philadelphia, and today we're diving into a topic that I get asked about constantly, and one that I've actually done a few times myself. We're talking about Philadelphia Sheriff sales, how they work, how to find the properties, how to register and bid what happens after you win. And most importantly, things that nobody will tell you before you jump into for the first time.

Speaker 2 0:46

We are here to share insights and experiences, not legal or accounting advice. Be sure to talk to your attorney, accountant, or professional advisor before making any decisions. Everyone's situation is different. Get the help that is right for you.

Yuriy 1:02

So this is going to be a solid piece straight for my experience, plus the official rules directly from the Philadelphia Sheriff's Office website. So whether you've been curious about this for a while or you've never heard of sheriff sale before, by the end of this episode, you're going to know exactly how this process works and hopefully be able to apply it in your personal investing. But first, a quick thank you to our sponsor. TrustArt Realty Management Rentals in Philadelphia is. Becoming more and more complex every day, whether it's navigating new legislation dealing with longer days on the market. We're just trying to figure out if your numbers still make sense in 2026. You don't have to do it alone. Trust our real to just launch two, free tools on their website, and I think a lot of you are going to find them actually very useful. The first is investment property analyzer. You can just go in, plug in your property numbers and see if it pencils out before you make an offer. The second is rent versus sell calculator bill specifically for Philadelphia markets. If you're sitting on the property and wondering whether you want to hold it or sell it, this tool will walk you through the math. Both are completely free. You just go to trustartrealty.com select owner's menu, and you will see two options in the menu for both of these calculators. And if you want to go a step further, trust our loyalty as usual, offering to all of our listeners a free rental analysis or a management advice session, whether you want to know if your current trend is realistic for where the market is right now, or you just need a second opinion for your portfolio, they've got you covered. Just reach out to us at trustartrealty@phillylandlordguy.com and click schedule a call. Alright, let's get into the Share Sale Place Playbook first let's clear something up. When people say share sale in Philadelphia they are actually talking about two completely different types of auctions and most people do not realize. There is a difference. Type one is a tax sale. This is when a property owner has fallen behind so far on their property taxes to the city of Philadelphia that the city forces a sale to recover what is owed. These are conducted online through a platform called, BID for assets that is BID, the number four assets.com. The opening bid on tax delinquent properties usually starts just at $1,600 and that sounds like a low number, but it's a live auction and you buy it for whatever the winning bid is. And the type two is the mortgage foreclosure sale. This is the more traditional share of sale. Most people picture a homeowner defaulted on their mortgage. The lender sued go to court judgment, and now the property is being sold to recover the debt. These are also run aligned through BID for assets. Both types are fully virtual. You are not showing up at the courthouse steps auction like you see in the movies. Everything happens online which is actually great news for investors like you and I and opens the door to anyone with a computer and the capital to participate, which is very important. They used to have those auctions in person when you had to go and. Stand up to, or press raise your hand to make a bit. But since COVID time during COVID, they stopped it for a while and then after that, instead of going back to in-person live auctions, they did it online, which in my opinion is a great step. So where do you actually find those properties? There are two main places. First is the Philadelphia Sheriff's Office website. They list current auctions and all of the official conditions of sales that is your source of legal rules for the game. I actually pulled the official conditions straight for the, from the website for today episode, so everything I'm going to share with you is actually outlined in their published guidelines, whether they follow them or not, that's a separate story. But these are published guidelines on their website. So the second place, and honestly the most useful one for day-to-day search is bids for assets website. This is where you can browse upcoming Philadelphia auction listings. Filter by property type, see opening beats of you photos if they're available, and track specific properties that you are interested in. The website usually lists a few upcoming auctions. You can open them up. Paul, you can see what each property. Properties address when it's going to go on sale. You can download it, you can do whatever you want to with that spreadsheet. It is the in invest investor phase and interface that makes the whole process actual and manageable and much more easier than it used to be. My personal workflow was to go onto. bids four assets for multifamily properties such as duplex, triplex, or quad or whatever multifamily properties they had in the ZIP codes that I already know and invest. And I just look through all of the A options for all of the properties I. Download them. I create a Google Map page specifically for those properties. So I just download all the properties, put them in the maps, so put all of those little maps so I can see where those properties like located which for me just makes it more visual and easier to see. And then I can just go property by property first. I would research. Research the proper online. See what it looks like on Google Maps, maybe drive by and research the. Zoning of this property if it had rental licenses, variances, or anything like that. So whatever may be useful for me to know for the property, especially if it's a multifamily, there are more things that I need to look for. And then if I determine that the property is something that I am interested in and all of the background of the property matches my criteria, I would ask my title, company to run the title. Let me know. If or what kind of liens the property has, so here is something that trips people up, and I want you to hear this clearly. Before you do anything, you cannot just show up at the auction, the day of the auction and start bid. You have to pre-register on on the website and submit a deposit before the auction ever opens. So if this is something that you want to do, just go to the website. Create your account. So you have that. And for tax sales, the deposit is usually $1,500 plus processing fee one deposit covers you for the entire auction date. So you do not need to deposit $1,500 for every single property that you want to bid on. It's for a day of the auction, and that means that you can bid on. Any or as many properties that you want within that single day with single deposit for mortgage, foreclosure sales. The deposit is a little bit. Half year is about $10,000 plus the same, processing fee, same structure, one deposit. You can be bid everything listed that day. That deposit gets applied towards your 10% down payment. If you win something, if you don't win anything, it comes back to you. But they usually send you an email and asking, do you want to apply it for the next auction or do you want to get it refunded to you? So you select whichever option you want to. If you know that you're gonna bid more, you can just reapply it to the next auction. 'cause otherwise, if you get it back and then you want to submit it again, you will have that $35 fee. But there is the heart. Rule. If you win and do not follow through on the purchase, you'll forfeit that deposit share. The sheriff's sale is the sheriff's office is very clear, no exceptions, no extensions. So on the register, when you are serious, your financing is lined up and you are generally ready to close. Once you registered and funded. The actual bidding is pretty straightforward. The auction Ryan runs online. Bids go up by at least a hundred dollars. Highest bid wins subject to reserve price being met on foreclosure sales. On the foreclosure side, there is something called an upset price. This is the minimum that the. Bank will accept for the property. As a bidder, you won't see that number. Sometimes they have or sometimes they reveal that upset price, but most times they won't. And as a bidder you will not know the number, but the platform will show you when you beat. Or if you just watch that auction, it will show you when the reserve has been met. If nobody beats high enough to hit the reserve, the bank typically takes the property back, what is called the bank walk back or a credit bid. No third party sale happens on tax sales. It's simpler. You have your opening bid highest. Offer takes it. It's similar. If you ever put something on eBay or any other auction websites, when you need to place a bid, the same thing you have the auction timer that runs off. It will increase by. 15 seconds, 30 seconds or a minute if you place your minute at the last moment. So do not hope that if you see the property listed four 1600 and you put a beat for 1700, that it'll run off in a second and you win. Now, it'll extend the timer for another minute or. They actually increase it for three minutes and then more bits will come in and so on. So sometimes it's very stressful process. Make sure that you know what you're doing. Have your hard numbers that you will not go over to make sure that you are not over bid for something that you don't want to. One thing worth knowing, there is also a second bid option. So if you were the runner up. Meaning that you were directly outbeat by the winner bid, you can register as a second bid and agree to purchase at the same price as the winner. Why would you do that? In case if the winner defaults and doesn't complete their purchase, you step in. And get the property. It's a backup position that's absolutely worth taken if you really wanted a specific piece of property and got out at the last second. So what happens after you win? This is where people get themselves into serious trouble. The payment deadlines are strict here is the timeline straight from the Sheriff's Office, condition of sale. Also, when you register, it'll tell you, when you register for bidding or for the website, it'll tell you what is the deposit amount, when you need to submit that deposit, when the deposit is due when your 10% is due. And when, the rest of the purchase prices, they will provide you with all information, but still you need to know that the day after the auction. So if you win the auction today, tomorrow, you have to put 10% down payment. For the action. So if you want something at $200,000, make sure that you have $20,000 by tomorrow to deposit. You can send it as wire transaction to the auction website. You do not pay directly to the sheriff's sale. You pay to the auction website and the auction website. Send it to the Sheriff's Sale. You will have that 10% down payment is due plus a buyer's premium. If there is any usually loan foreclosure sale, that's about 1.5% of the purchase price. On tax sales. It's about 10% of buyer's premium, which is a significant and something that you need to factor in into your total cost. When you're bid, you need to keep in mind that your actual number will be 1.5% or 10% higher than what you beat up to. So 15 days after the auction, the remaining 90% of the purchase price is due. That's what the share sale website says, but I'm pretty positive that it's 10 days, not 15, so if that 15th day falls on the weekend or holiday you get until the next business day, but that's the only the flexibility you get. So say again, if today is Monday, you are winning a bid on the property by tomorrow, you have to have your 10% down payment that you pay and. I make sure that by the next Tuesday you have the remaining 90% of the purchase price. Miss either of those deadlines and you are in default, you are deposits forfeited. Full stop. So that's somebody who signed up as the second bid will get your property and they will buy it at the price that you wanted. And one more critical step Make sure when you register after the closing that you put exact name that you will want to have on your deed. If it's LLC, make sure that you have that LLC ready and that you put in that LLCs name. If it's somebody else's name, make sure that you have that name again, they will provide you with the form. They will ask you the question, but you will have a limited. The time amount when you need to provide all of that information to make sure that everything is processed on time. So now for the part that doesn't appear in the official rule book, the staff, you'll learn from actually doing this. Everything is sold completely as is. And if you go to. The auction website, they do have help videos on how to bid on foreclosure sales or tax sales. They don't do it just for Philadelphia. It's a portal that does it across the country for multiple different townships and counties. So those help videos, they are a little bit outdated and they cover the whole country. Not county specific. Philadelphia Sheriff Sale has their own videos as well that you can look up if you are interested. But again, everything is sold as is no inspection contingency, no warranty, no representations from sheriffs or bids for assets about the condition of the property. So you are buying whatever condition that property is in. Sometimes, or most of the times, sight unseen because there is no agent involved, there is no key. You cannot just go and see the property. And the property very well may be occupied. If there is a collapsed ceiling or failed foundation, open code violation, or someone living inside that is now your problem. Do your lien research before you bid, not after. This is the one that actually can hurt you if you're not careful. Tax sales can clear certain liens, but not all of them. Mortgage, foreclosure sales have their own rules about what gets wiped out and what survives the sale. Some municipal liens, water, gas, certain sea charges can survive and follow the property to the new owner. Pull the title history. That's where I go to my title company and ask them for the title history. Check for the open permits, check for water and gas liens with the city. I strongly recommend working with Philadelphia Real Estate Professional. That can be an attorney or a title company. Who knows, share of sale, process and law before your very first purchase. The cost of that advice is nothing compared to the cost of inheriting a lien that you didn't know about or occupants. Sometimes people are still living on this properties when you take title, the prior owner, a tenant, a family member, whoever it is, if they. Don't leave voluntarily. You are going through the court and it's not your standard eviction. You cannot evict someone that you do not have lease with or you cannot evict a previous owner. So that is additional timeline. It costs more money. There are different rules than for eviction. You will need a writ of possession through the sheriff's Philadelphia Sheriff's Office and that. Process takes time. Factor that in your timeline and your budget when you are underwriting your deal, the timeline from the winning to hold an de. Is longer than you think. And again, according to Phil Philadelphia Sheriff Sale website, the title should be ready within 10 days, which is not happening. The last time when we bought property from Share Sale, it took, I think, a little bit over a month and a half for us to get the title. This time, we won the bid on October 7th. And the title was ready March 30th. So that was six months when we were just sitting, we had to pay for the property in October, and we could not do anything until we have that date. Also, you do not know when did it'll be recorded? Constantly keep checking with the sheriff's sale. If they even answer the phone or email, see if the deal is ready. So you need to have your property insured right when you get the duty. You want to make sure that you have insurance in place so nothing happens. If you do not know what date your de is recorded. You do not know when you own this property and you do not know when to start your insurance. So you may want to start insurance sooner than your details is recorded. So even when everything goes right no defaults, no legal complication, there are post sale, distribution schedules, confirmation periods, and the sheriff office operates on. Their own calendar plan for months between the auction date and having a deed in hand that is ready for you to start a rehab or place a tenant or do whatever you're planning to do with that property. Do not commit to a contractor's start date the week after you win. It takes time. So after all of that, is the share sale investing actually worth it? Honestly, it depends. That's the answer with everything in real estate. It depends on your criteria, depends on what you're looking for. And, it's only if you go in educated and patient. The deals are real. I've personally, again, acquired a few properties through this process. Most of them were I bought them before COVID time, but after COVID to, I put just recently purchased one. And I could not have come closer to getting that specific property for the price through a traditional transaction. The equity you can capture from the one is great. Not something like you would usually see on MLS or buy from MLS, but at the same time, the risks that you're getting with it, then not knowing what the property condition is like, they're huge. So you really truly need to make sure that is what you want to get into and you have a financing to cover everything that needs to be done to that property and cover your back if if need to. It's definitely not passive, it's not fast, and it's absolutely not for someone who hasn't done their homework on a specific property. So here's my recommendation. If you're just getting started, spend a few more months just monitoring bids four assets before you ever register or put up a deposit. Get familiar with what kind of properties come up, what neighborhoods, show up repeatedly what opening bids look like, what properties actually sell for versus where bid biding opens. Build your instincts and your processes before you put money down. And if you do pick something up at the sheriff sale and you need help printing or getting a trend ready and plus a place, a tenant, this is exactly the kind of work TrustArt Realty. Feel free to reach out at trustartrealty.com and schedule that call. That's the Philadelphia Sheriffs Sale Playbook, two types of sale tax and mortgage foreclosure. Both run online through B four assets, deposits required upfront, strictly payment deadlines, everything sold as is, and the post-sale process that requires a lot of patience and money. If you found this piece that useful share it with the fellow fee landlord investor like it, subscribe. And if you have any comments, drop them in the comments. If you want us to cover some specific topic or the area of the city, drop it in the comments as well. Or email us at info@phillylandlordguy.com and I'm Yuriy. This is the Philadelphia landlord guy, and I'll see you on the next one.