Private Auctioneers Could Help to Reduce Foreclosure Timelines

Recently, there have been deep budget cuts in the offices of some of the County Sheriffs in Ohio. As a result of the budget cuts, these Sheriff's offices have reduced staff and other resources, resulting in severe delays in scheduling of sheriff's sales.  In some counties, these delays may cause the foreclosure process to be extended up to eight to twelve months.  But, Ohio law provides a mechanism which could help lenders curtail some of these extensive delays.   Lenders should consider the option of instructing foreclosure counsel to file a special motion with the Court asking for the appointment of a private auctioneer to schedule and conduct the foreclosure sale in place of the Sheriff. 

Under Ohio Revised Code Section 2329.151, the public auction of real property levied upon by execution is to be conducted personally by an officer of the court or by a licensed auctioneer. Ohio Revised Code Section 2335.021 provides further that a court may appoint an auctioneer to conduct an auction of real property required to be sold by the Sheriff.  Pursuant to this authority, once the Foreclosure Decree has been issued by the Court, the Court then has the authority to appoint a private licensed auctioneer to market, advertise, fix a minimum bid price and conduct a public foreclosure auction in place of the Sheriff.  The Court may also fix the compensation to be paid to the auctioneer for conducting the foreclosure sale in place of the Sheriff.

Aside from reducing the time frame to schedule the sale, a public auction marketed and conducted by a private auctioneer in place of the Sheriff, would also enhance the sale process by reaching out to a greater number of potential bidders, thereby maximizing the ultimate sale price of the property.  

As you might expect, the appointment of a private auctioneer does not come without an added expense to the lender.  However, the added expense could prove to be sensible under these circumstances.  While the Sheriff earns a small fee to conduct the sale, and may also be entitled to receive a limited amount of poundage from the proceeds of a foreclosure sale, a private auctioneer may demand a higher fee for his or her services, typically based upon a percentage of the sale price of the property.  Although the cost to conduct a sale through a private auctioneer might be slightly higher, the benefit of reducing foreclosure timeframes, as well as the added benefit of potentially maximizing the sale price of the property could prove to be a wise investment for lenders until the Sheriff's offices are able to eliminate unnecessary delays in the scheduling of foreclosure sales in Ohio.