Certificate of Sale
Definition and meaning of Certificate of Sale in real estate.
A certificate of sale is a legal document issued to the highest bidder at a judicial foreclosure sale, certifying the purchase of the property and establishing the right to receive a deed after a redemption period expires.
In more detail
This document does not immediately transfer title of ownership to the winning bidder. Instead, it serves as evidence of the buyer's equitable interest in the property during the statutory redemption period. During this timeframe, which varies by state, the original owner has the right to reclaim the property by paying off the debt and associated fees.
If the owner fails to redeem the property within the allowed time, the buyer can exchange the certificate of sale for a deed that grants full ownership.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Issued at | Judicial foreclosure sales or tax auctions |
| Statutory timing | Redemption periods vary significantly by state law |
| Watch out for | Does not convey immediate full ownership rights |
An investor purchases a foreclosed property at a county auction and receives a certificate of sale, which she holds for several months until the state-mandated redemption period ends without the former owner making a payment.
Frequently asked questions
What is the difference between a certificate of sale and a deed?
A certificate of sale registers a buyer's bid and right to future ownership, whereas a deed is the final document that transfers full legal title. The deed is only issued after the legal redemption period expires.
Can a certificate of sale be sold or transferred?
Yes, in many jurisdictions, a buyer can assign or sell their interest in a certificate of sale to another party before the deed is officially issued.