A trustee sale is the process in which a person is removed from a property as the result of not paying the for the property. This page will address only non-judicial foreclosures, and more specifically Missouri trustee sales. It will not discuss Kansas judicial foreclosures, which are discussed in more detail on this webpage.
What Notices Are Required Prior to a Trustee Sale?
Missouri law requires that notice be sent to the property owner via certified mail and that notice is published in the newspaper 21 days prior to the sale. Additionally, any party having an interest in the property as of the date 45 days prior to the sale is required to get notice.
Additionally, many deeds of trust may have further notice requirements that must be completed prior to conducting a trustee sale. Therefore, it is always important to review the deed of trust before starting this process.
How Long Does a Trustee Sale Take?
A trustee sale can be conducted in as little as 21 days after the file is sent to the attorney. With that being said, it is usually a little bit longer due to publication deadlines in the newspaper. You should expect the sale to take place within no longer than 35 days after the file is opened (unless there are additional notice requirements in the deed of Trust).
What Are Redemption Rights?
Redemption rights are the rights of the borrower and other parties having liens against the property to redeem or purchase back the property following the trustee sale. The redemption rights in Missouri are rarely exercised as the borrower must provide notice to the trustee prior to the sale, and then post a bond with the court within 20 days following the sale. As a general statement, if the borrower doesn’t have money to pay the loan, he or she likely also does not have money to post the bond.
If the borrower does properly exercise its redemption rights, the borrower can stay in the home, rent it, or sell the redemption rights to a third party. If the home is redeemed, the purchaser gets back the money he or she paid, plus some interest.
Does a Trustee Sale Wipe Out Other Liens Against a Property?
A trustee sale will only eliminate liens that were filed after the lien that is foreclosing and that have notice of the proceedings. In other words, if a first mortgage holder conducts a trustee sale, it would wipe off the second loan (assuming the second lienholder received notice). On the other hand, if the second deed of trust forecloses, the sale of the property would be subject to the first deed of trust, which would remain on the property.
The remedy for a lower lienholder is to redeem the property as discussed above. In other words, if the property is worth more than the first lien, the second lienholder can buy it. If it is not worth more, than the lien did not have any value anyway. Because this is the recourse, a second or later lien is only eliminated if it has notice of the action so as to have an opportunity to redeem the property. Therefore, it is possible for a later filed lien to remain with the property.
What Does the Trustee Sale Process Look Like?
Unlike a Kansas foreclosure, a trustee sale is a rather straight forward process. An overview of this process is below.
Step 1: Sign up for Guarded Pockets™
If you are not yet a member of Guarded Pockets™, the first step is to become a member. In addition to allowing us to help with your business planning, Guarded Pockets™ also provides many other benefits, including unlimited scheduled phone calls with a real estate attorney, registered agent and deed of trust trustee services, state compliance monitoring, daily REO and distressed MLS listing emails, and discounted title and real estate brokerage services. You can learn more about Guarded Pockets™ or sign up for a free trial by clicking on this link.
Step 2: Sign up for Services
Once you are a member of Guarded Pockets™, you can sign up for our services including our foreclosure-related services.
Step 3: Intake Form
In order for us to get the information we need to proceed with your trustee sale, we will ask you to complete an intake form and upload the relevant documents, such as a copy of the deed of trust and any notices you sent to the borrower. We will also need to request a title report to ensure we name all of the interested parties. It generally takes a few days to receive the title report.
Step 4: Attorney Review
The next step in the process is for the attorney to review the title report and information you submit to make sure there are no issues and to identify the parties who are to receive notice of the sale. This generally takes a business day or two.
Step 5: Waiting Period
We will then select a sale sate and send notice of the sale to all parties with an interest in the property as of the date 45 days before the sale. We will also ensure that notice is published in the newspaper.
Step 6: Trustee Sale
On the date of the sale, we will arrive at the courthouse to conduct the sale. You are not required to be there, but can be. The sale is usually very quick (less than five minutes). Prior to the sale, we will discuss the starting bid with you, which will be up to you and can be anything up to the amount owed by the borrower.
Step 7: Trustee’s Deed
Following the sale, we must wait for the affidavit of publication from the newspaper. Once this information is received, we will draft and record the trustee’s deed transferring ownership of the property. If you are the winning bidder, you now own the property. If you are not the winning bidder, we will distribute the funds to you once the deed is recorded. This process usually takes 1-2 weeks after the completion of the sale.
How Much Does a Trustee Sale Cost?
We charge our clients an honest, fair, and transparent rate for our quiet title actions. You can view our current rates by clicking on this link, which is the same link that you will use to sign up for services after you are a member of Guarded Pockets™.
Where Can I Learn About Upcoming Sales Conducted by RDRE?
We post an up-to-date list of our scheduled sales on our webpage at Upcoming Sales. The information on this webpage is pulled from our databases so it is the most current information available. If a sale is cancelled, it will be pulled from the website. If it is continued, the date will be updated. Opening bids are updated upon our receipt of the same from the lender.