After the foreclosure sale, the trustee is obligated to execute (in the presence of a notary) a deed to the highest bidder at the sale. The trustee’s deed will bind the debtor to the warranties set forth in the deed of trust, usually a general warranty of title. It is good practice to file the trustee’s deed at the earliest possible time after the foreclosure sale. See Form of Substitute Trustee’s Deed located at the end of this Chapter.
An accompanying affidavit may also be executed (and probably should be executed) to evidence the trustee’s compliance with the deed of trust and applicable law in the conduct of the foreclosure sale. A record should be kept of the exact time of the sale and the amount of the highest bid. See Form of Affidavit Regarding Foreclosure located at the end of this Chapter.
Proceeds of the sale are to be distributed pursuant to the terms of the deed of trust. Typically proceeds are paid, first, to reimburse the costs of the sale, including reasonable attorneys’ fees and a fee for the trustee, and second, to the lienholders in order of priority. If proceeds remain after the lienholders have been paid, the balance will be distributed to the debtor.
After the sale is complete, the notice of trustee’s sale, the affidavit as to posting and filing, the trustee’s deed with the affidavit of delivery of notice of trustee’s sale attached as an exhibit, and the affidavits of the trustee, the purchaser, and a witness, if available, concerning conduct of the sale should be filed in the real property records of the county.