About SRI's Online Auctions
Local governments across the United States conduct a variety of real estate auctions in the effort to collect delinquent real estate taxes, return real estate to the tax rolls and promote the redevelopment of blighted areas. Also, as a result of the ongoing mortgage foreclosure crisis, local governments have been confronted with carrying out countless foreclosure auctions following mortgage foreclosure lawsuits. Although real estate auctions held by local government officials vary considerably, they may generally be broken down into a few distinct categories.
Tax lien auctions are conducted to collect delinquent real estate property taxes for local governments. The key characteristic of this type of auction is that purchasing a tax lien does not convey ownership of the property for which the lien is sold. A winning bidder in a tax lien auction has purchased a lien against the real estate, subject to the right of redemption, and must comply with an often technical and time-sensitive legal process in order to obtain title or ownership of the property and take possession. If a property is redeemed during the applicable redemption period, the lien buyer loses the opportunity to obtain ownership of the property, but receives a return of the bid amount plus interest and other amounts that may apply. Each jurisdiction has a unique post-auction process for lien buyers, who should pay special attention to the applicable statutes and regulations that govern the sale of tax liens in each state.
Tax deed auctions are conducted by local governments to return tax delinquent properties to the tax rolls and foster productive use. These auctions generally occur after a local government unit has completed the legal steps required to take title to or ownership of tax delinquent properties. A tax deed auction is not a sale of a tax lien due to delinquent real estate property taxes, but rather a sale or disposal of real estate owned by a local government unit. A winning bidder at a tax deed auction has actually purchased the real estate, not merely a lien on the property. A winning bidder will be issued a deed for the real estate by the applicable local government unit within a reasonable period following the auction, but such a deed generally contains no representation, covenant or warranty of title and does not necessarily protect the winning bidder against any outstanding liens or encumbrances. A deed issued following this type of auction may not convey insurable or marketable title.
Foreclosure auctions concern the sale of real estate by a local government official pursuant to a court order as a result of a private transaction, typically between a financial institution or lender and a defaulting property owner/borrower. This type of auction is not conducted to collect delinquent real estate taxes, but rather to collect on a judgment obtained through legal proceedings against the property owner. Foreclosure auctions are often held by local law enforcement officials such as a county sheriff. The winning bidder in a foreclosure auction, like a tax deed sale, has purchased the real estate itself, rather than a lien on the property. A foreclosure auction, like all other auctions conducted online by SRI, is a buyer beware sale. A deed issued after this type of auction generally contains no representation, covenant or warranty of title and does not necessarily protect the winning bidder against any outstanding liens or encumbrances.
SRI is committed to making the local government real estate auction process more efficient, transparent and convenient for all interested parties. Our site provides a secure, streamlined online real estate auction system as well as a wealth of helpful information regarding upcoming auctions and the auction process for local officials, attorneys, real estate investors and property owners. SRI posts FAQs and the applicable rules for each online auction. However, all bidders are strongly encouraged to familiarize themselves with the applicable laws of the state under which each auction is being held.