If a Michigan homeowner can't pay their mortgage, the bank can begin foreclosure proceedings on their home. This includes a sheriff's sale, or a public auction, of the property and its structures. The initial homeowner has a redemption period of six months to a year to redeem the property or vacate it.
What Is a Sheriff's Sale in Michigan State?
A sheriff's sale is a public auction of foreclosed real estate properties. It occurs when an owner cannot make their mortgage payments so possession of the property returns to the lender or plaintiff, who will attempt to sell it to recoup some or all of the mortgage balance. Sheriff's sales are local events conducted at the county level. Depending on the county, they can occur once a month or once a week.
Several types of properties are auctioned at a sheriff's sale, including single-family homes, mixed-use properties, multi-family homes, residential complexes, and even commercial properties. Sales are open to the public, and some counties even conduct them on their courthouse's front steps.
Those bidding on foreclosed properties must have the certified funds available to do so. Some sheriff's offices allow interested parties to view property sales online, or they can go to the local sheriff's office and ask for a list.
Can the Homeowner Redeem Their Property?
Once a home goes into foreclosure, the county schedules a sheriff's sale date and publishes it in a local newspaper for four straight weeks. A sale date notice is posted on the property within two weeks of the notice appearing in the paper. A sheriff's deed lists the person or company's name who now has possession of the foreclosed home and the former homeowner's last date to redeem the property.
The redemption period for a property starts on the day the sheriff's deed is placed on record. The homeowner typically has six months to vacate the property or regain ownership. If the amount due is less than two-thirds of the original debt, they have a redemption period of up to 12 months.
The homeowner can stay on the property during this time but does not have to make payments. Nevertheless, they must allow the buyer (the plaintiff or lender) to inspect the property and structures during the redemption period.
Process of a Michigan Sheriff's Sale
Grand Traverse County is one example of a county that holds monthly sheriff sales. Its sales are "open-type" foreclosure auctions – the plaintiff submits an opening bid, and anyone at the auction can enter a third-party bid on a property.
To have the highest bid, an individual or entity must bid at least a dollar more than the plaintiff or anyone else who bid before they did. The county accepts offers for up to an hour after the auction and may extend an auction if there is more than one bid on a property.
Buyer's Responsibility at Foreclosure
The third-party bidder who is most successful must pay the bid amount in bank-certified funds to the mortgage lender on the deed. They must pay a separate check to Grand Traverse County in the event of a surplus amount. A sale may be stopped due to adjournment, cancellation or settlement.
When the county sheriff's office conducts a sale, it does not know if anyone occupies a property. It will not permit prospective bidders to inspect any buildings on a property before a sale. All properties are sold "as is" – the sheriff's office will not have any information regarding a property's condition.
The successful bidder is responsible for legally removing occupants from a property. It is also the buyer's responsibility to pay property tax on the property.
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.