Staff Report
TOMS RIVER-Each Tuesday in downtown Toms River, a high-stakes bidding war takes place, quietly tucked away in room 119 at the Ocean County Administrative Building. It’s where real estate investors congregate and wage bidding wars against each other to buy foreclosed homes being sold by the banks at the lowest possible price.
Undersheriff William T. Sommeling oversees the county’s foreclosure auctions as Captain Vallarta Hill serves as auctioneer, starting each bid off at $100, most climbing to several hundred thousand dollars in minutes as bidders up the ante in $1,000 increments.
“I have three hundred,” Captain Hill said, after one investor bid 300,000 thousand dollars on a foreclosed Southern Ocean County home valued at $740,000.
“301!” shouted another investor.
After looking down at some paperwork consisting of online research, another rebutted, “302!”
Quickly another, responded with, “303!”
The initial bidder, looking annoyed by the newcomer in the bidding war quickly jumped his bid by $5,000.
In the end, the home sold for $312,000 and the next one was announced.
This time a Jackson Township home on 36 Serendipity Lane came up for bid. As always, bidding started at $100.
The bidding was quicker and more fierce on the Jackson home. Homes.com valued that home at $459,000 and it was sold for just $210,000. Then another in Jackson at 210 Crescent Lane, met the same fate, selling for tens of thousands of dollars below the market range in the neighborhood.
Some show up just for the show, but others show up to offer large sums of money these foreclosed homes, sometimes far below comparative market pricing. It’s risky business. Potential buyers cannot pre-inspect the homes and are on the hook for any unpaid local taxes or liens. If the home is presently occupied, those tenants become the problem of the new home owner.
Anything can happen in during a home’s lengthy foreclosure process. Broken water pipes, vandalism, mold and other problems from lack of upkeep are always a possibility in these ventures. Bidders may not inspect the homes prior to bidding.
Immediately after the auction, the winners must pay 20% of the final price on the spot and are required to sign the proper legal indemnification paperwork.
Don’t bring your credit cards, because at the Sheriff’s auctions, they only take cash, certified bank checks, cashier’s checks and treasurer’s checks.
Once the auction is complete, nothing is written in stone. A homeowner has ten days to reclaim their property if they can. In some cases, a homeowner can file for bankruptcy which would also nullify the auction if completed by the 10th day after the sale.
After a home is released to the buyer, the deed is still not guaranteed. The new owners must pay off any liens, back-taxes or other encumbrances attached to the deed. It is often wise to run a title search on the property before bidding.
When the property is finally in the hands of the buyer, it becomes their responsibility to evict the existing homeowner or tenants should they still occupy the home. The eviction process can be lengthy in New Jersey and the new owner will have to pay for damage repairs and to be responsible to pay the local property taxes.
The buyer has 30 days to pay the balance of the purchase. If not, under New Jersey state law, the buyer will forfeit their deposit.