What is a trustee sale?

A trustee sale (also known as a foreclosure auction or a sheriff's sale) is a public auction of real property that is held to satisfy a mortgage or other type of lien on the property. The sale is usually conducted by a trustee, who is appointed by the lender or lien holder to oversee the sale process.

The trustee sale process begins when the lender or lien holder files a notice of default (NOD) with the county recorder's office, which indicates that the borrower has fallen behind on payments. After a certain period of time, typically several months, the trustee will schedule a trustee sale and notify all interested parties, including the borrower and any other lien holders.

At the trustee sale, the property is typically sold to the highest bidder, who is required to pay the full amount of the bid in cash or through certified funds. If the property does not receive any bids at the trustee sale, it may revert back to the lender or lien holder, who will then be responsible for selling it through other means.

The proceeds from the trustee sale are used to pay off the outstanding mortgage or lien on the property, as well as any other costs associated with the sale. Any remaining proceeds are then distributed to the borrower or other interested parties, in accordance with applicable laws and regulations.