Bidder Information Center
Step 1. Courthouse sale.
The tax sale is conducted at the County Courthouse, either on the county courthouse steps, or in another place designated by the Clerk of Court (if you are not sure where to go, ask the Clerk’s office where foreclosure sales take place).
The person conducting the sale will start the bidding at a certain price to cover back taxes and foreclosure costs. Anyone at the sale may ‘raise’ this opening bid, and any raised bid may in turn be raised by another party at the sale, just like an auction. If the last bid submitted is not raised by any other party at the sale, the sales person will announce the last bidder as the winner, and will require the winning bidder to immediately tender a 5% deposit of their bid, or $750.00, whichever is greater. Please note that this tender must be made in cash or certified funds; personal checks cannot be accepted.
The sale at the courthouse usually takes anywhere between 5 to 30 minutes, depending on how many bidders attend the sale.
Step 2. Upset bid period.
The winner at the Courthouse sale is not necessarily the person who will end up buying the property. This is because state law allows an “upset bid” period of 10 days after the foreclosure sale. During this upset bid period, any party can file an upset bid with the Clerk of Court. Any upset bid filed must be:
- 5% or $750 (whichever is greater) than the previous bid (in other words, no upset bids for just $1.00 more!);
- Tendered with a cash or certified deposit of 5% of the upset bid amount, or $750, whichever is greater.
- Made no later than 10 days after the Courthouse sale, OR no later than 10 days from the last upset bid filed.
It is possible for many upset bids to be filed in a foreclosure sale: The winning bidder at the Courthouse sale has his bid upset by an upset bidder 8 days later; then that upset bidder has her upset bid raised by someone else, and so on. Eventually however the bid gets raised to a point high enough where no one wants to raise it further. State law is designed this way, in order that the maximum value be obtained for the property being foreclosed. Still, many properties end up selling for a price that can be substantially lower than the market value of the property.
If you paid a bid deposit of 5% or $750 on a bid that is later upset, you are entitled to a return of the full bid deposit from our office, or the Clerk of Court.
Step 3. Close of bid period.
After 10 days pass with no further upset bids being filed, the bid process is closed, and the last and highest bidder is deemed to be the final winning bidder. As the attorney for the County, we will inform you of this, and also at that time require you pay us your bid amount, either in cash, certified funds, or attorney’s trust account check.
- If we are holding your bid deposit you gave to us at the Courthouse sale, we will apply this money towards your bid amount.
- If the Clerk of Court is holding your bid deposit made for an upset bid you filed with the Clerk, we cannot apply this amount to your bid amount. You must tender the full bid price to us, and when this is done, the Clerk of Court will return your bid deposit back to you.
We require that your purchase funds be tendered to us no later than 2 weeks after we have informed you that you are the winning bidder.
Step 4. Confirmation of Sale.
After you have tendered your bid monies, we will file a Motion for Confirmation of Sale with the Court. This is largely a formality, but it takes usually 10 days or so, and we cannot give you your deed to the property as the winning bidder until the Court has officially confirmed the sale.
Step 5. Commissioner’s Deed.
After you have tendered your funds, and the Court has confirmed the sale, we will send you a Commissioner’s Deed to the property, usually the day after the sale is confirmed. It is your responsibility to see that your deed is recorded with the County Registrar, and you should do this as soon as possible.
It is vital that all tax foreclosure tax sale auctions are free from collusion, bid rigging, and any other activity designed to suppress the final outcome of the auction. The expectation for tax foreclosure auctions is that free and open competition exists in bidding at all times. For the process to work, private individuals and organizations participating in the bidding process must do so independently. When competitors collude or engage in bid rigging, they are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice, and/or local prosecution. The relevant North Carolina Statute is G.S. 75-1, the Unfair Trade Practice Act (UTPA). This can be enforced by individuals; or by the NC Attorney general or the local District Attorney. Civil and criminal penalties are assessed for violations; criminal violations are a felony.