How the US Treasury and Marshals sell forfeited real estate

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Kooky

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When a federal court in the United States orders a house, a warehouse or a plot of land forfeited, the property does not stay with the government for long. It is sold, and the money goes to a forfeiture fund. Who sells it, and on what terms, depends on which federal agency made the case. A property from a Secret Service fraud investigation goes to a Treasury auction with a cashier's cheque and a fixed closing clock. A property from a Drug Enforcement Administration case is generally listed with a licensed broker.

This guide follows a forfeited property from the agency that seized it to the deed the buyer receives. It sets out which body sells what, how a bidder registers and what must be put down, how the online bidding works, whether a buyer's premium applies, when the money is due, what title passes and what a missed deadline costs. Every rule is federal and is given as the U.S. Department of the Treasury, its real property contractor, the U.S. Marshals Service and the Department of Justice publish it. Worked examples are labelled and use invented prices.

General Terms of Sale and Frequently Asked Questions of the U.S. Treasury seized real property auctions, read in October 2026.

Two forfeiture programmes, two sellers

Federal forfeiture runs through two separate programmes, and each has its own seller of real estate.

The first belongs to the Treasury. Its Executive Office for Asset Forfeiture auctions property seized or forfeited for violations of the federal laws enforced by the Treasury and the Department of Homeland Security. The Treasury's real property auction pages name three participating enforcement agencies: IRS Criminal Investigation, Homeland Security Investigations and the U.S. Secret Service. According to the same pages, most of the property was seized because of smuggling, drug trafficking, money laundering, credit card fraud, food stamp fraud, mail fraud or other illegal activity.

The second belongs to the Department of Justice. The U.S. Marshals Service says the department's Asset Forfeiture Program was created in 1984, when Congress passed the Comprehensive Crime Control Act, and that the Marshals manage and sell seized and forfeited assets on the department's behalf. The agencies that take part include the Federal Bureau of Investigation, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Attorneys' Offices and the U.S. Postal Inspection Service, along with investigative arms of the Food and Drug Administration, the Department of Agriculture, the Department of State and the Department of Defense.

The Justice Manual, the Department of Justice's own rulebook, draws the line between the two in section 9-115.100. The Marshals Service has primary authority over the management and disposal of seized assets in its custody. Assets seized by Treasury agencies are handled by property custodians, generally contractors, under Treasury guidelines.

Tax seizures are a third and separate channel. The Internal Revenue Service runs its own auctions for property taken for unpaid tax, under different rules, and nothing in this guide describes them.

How the Treasury lists and auctions a property

The Treasury says about 300 public auctions a year are held across the United States and Puerto Rico to sell forfeited property of all kinds. For real estate it has designated one company, CWS Asset Management and Sales, as the prime contractor that maintains and sells seized and forfeited real property. The programme's own description says the contract covers all 50 states, the District of Columbia and every U.S. territory, and that the contractor has worked for the Treasury and the Department of Homeland Security since 1990.

What comes up for sale is varied. The Treasury lists single and multi-family residences, residential and commercial land, commercial buildings and warehouses, and operating businesses.

Each property has its own page on the official Treasury auction site and its own sales flyer. Those two documents carry what the general rules leave open: the amount of the deposit, the date by which full payment is due, the taxes the buyer will pay and the kind of deed. The Treasury says no fee is ever charged for access to the listings.

Two formats exist on paper. The programme description says properties are sold by online auction or at an auction held at the property, and that all auctions are open to the public. In practice the choice has narrowed: the Treasury's answers to frequent questions state that, at this time, all of its real property auctions are held online only. The rules for live sales remain in the General Terms of Sale, and they are described further down because they still define how a written bid or a bid by proxy would work.

No broker is required. The Treasury says a bidder does not need a real estate broker to take part, and that a bidder who chooses to use one settles the fee or commission with that broker alone.

Who may bid, and who may not

The auctions are public, but the General Terms of Sale close the door on several groups.

• Age. A bidder must be 18 or older.
• The former owner. The party from whom the property was seized may not bid, and neither may that party's agent. The Treasury adds that forfeited property is not sold to the defendant or to the defendant's agents.
• Treasury staff. The Treasury's answers say employees of the Treasury Department and their immediate family members are prohibited from bidding on any real property. Employees of other agencies are told to check their own agency's policy, and the terms bar federal employees whose agency rules forbid it, together with their agents and household members.
• Contractor personnel. Staff of the contractor, of a subcontractor or of a vendor who have access to non-public information about a property may not bid.
• Debarred persons. Anyone debarred under section 101-45.6 of title 41 of the Code of Federal Regulations is excluded.

The consequence of a breach is spelled out: the government may cancel the sale without liability, and the Treasury says it may cancel a sales contract after reviewing records.

Citizenship is not a condition. The Treasury says people who are not U.S. citizens may take part, on showing a valid photo identity document, and that every payment must be made in U.S. funds.

Someone bidding for another person needs a notarised power of attorney. The Treasury's answers say it must include the buyer's Social Security number and wording that gives authority to bid on and buy real estate. A bidder acting for a corporation, a business or a limited liability company must, under the terms, have official documentation proving eligibility to bid.

A winning bid is not private. Under the terms, the winning bidder's name, the address of the property and the purchase price are published on the Treasury auction website.

Registration and the deposit

Online bidding takes place on the contractor's bidding platform and, according to the Treasury, requires a two-step registration. The second element is money. Each auction calls for an initial deposit whose amount is set in the sales flyer or on the auction page, not in the general rules.

The form of payment is narrow. The Treasury accepts only a cashier's or certified cheque made payable to CWS Marketing Group, Inc. It refuses personal and business cheques, money orders, cash, credit cards, bank letters and letters of credit. Some properties offer a deposit by bank wire; the terms of each sale say so when they do.

Deposits do not travel. For online sales the Treasury requires a separate cashier's cheque for each auction, and says a deposit cannot be transferred between auctions or between days, or held for a future auction.

Bidders who lose get their money back within a stated time. For online sales, the deposits of unsuccessful bidders and of back-up bidders are mailed by certified mail within 5 business days, and a deposit that came by wire is returned electronically to the account it came from within the same 5 business days.

The winner's deposit goes the other way. It is kept as the first payment towards the price, and the Treasury describes it as non-refundable.

A second payment follows quickly in an online sale. The General Terms of Sale word it this way: the high bidder shall deliver "ten percent (10%) of the Purchase Price less the initial money deposit, whichever is greater", by cashier's or certified cheque or by bank wire. The same clause gives three business days: a high bidder who has not delivered the money by then may lose the initial deposit. The sentence does not say what the 10 per cent figure is being compared with.

A worked example, with invented figures and one assumption. Assume a winning bid of US$400,000 and an initial deposit of US$25,000 fixed by the flyer, and assume, as one reading of that clause, that the further deposit brings the total on deposit to 10 per cent of the price. Ten per cent of US$400,000 is US$40,000. The further deposit is US$40,000 less US$25,000, or US$15,000, due within three business days. The balance at closing is US$400,000 less US$40,000, or US$360,000. The three payments, US$25,000, US$15,000 and US$360,000, add up to the price. The flyer of a real sale governs the real figures.

How the online bidding runs

The General Terms of Sale describe a system built on maximum bids. A bidder enters the highest amount he or she is prepared to pay, and the system bids on that person's behalf, one increment above the current bid, until the maximum is reached. The terms give their own illustration: with the current bid at US$1,000 and an increment of US$100, a maximum bid of US$5,000 first produces a bid of US$1,100.

Four rules shape the contest.

1. A bid can be raised but never lowered.
2. When two maximum bids are equal, the earlier one wins.
3. When a maximum bid meets or exceeds the reserve, the reserve becomes the next increment.
4. A bid placed in the last minute extends that lot's closing time by one minute, a mechanism known as a soft close.

On the question of a reserve, the two Treasury documents do not say quite the same thing. The General Terms of Sale state that properties carry a minimum reserve unless they are explicitly offered without one, and that the reserve is not made public. The answers to frequent questions say that generally there is no minimum or reserve bid, that one is occasionally set without being published, and that it is usually met. Both agree on what follows a shortfall. The terms let the government withdraw the property before a sales contract is executed, and the answers add that it may negotiate with the high bidder. The government also keeps the right to reject any or all bids.

A winning bid is not the last word either. The terms say a bid accepted by the auctioneer and the government forms a legally binding contract, subject to the government's final acceptance. The bidder cannot withdraw it or attach conditions to it. If a technical problem disrupts online bidding, the government may declare the item sold, postpone the sale or list the property again.

Live auctions and written bids

When a sale is held on site, at the property or at another stated place, the Treasury's rules change in three respects.

Registration happens in person, during the window posted for the sale. The bidder shows a valid government-issued photo identity document and a cashier's cheque for the deposit, and receives a bidder number. A registration form is completed for each sale. The bidding itself is open and progressive, by voice, and the Treasury warns that it progresses quickly. The opening bid is set on the floor, whereas in an online sale the starting bid is posted in advance.

The deposit is handled differently. Right after the bidding, the high bidder and the second-high bidder hand over their earnest money. The cheques of everyone else are simply not collected. A bidder who wants to bid on several properties but buy only one needs one cheque; a bidder who intends to buy several needs a deposit for each, and the Treasury says no partial refund is possible if only some are won.

A bidder who cannot attend may send a written bid: a completed written bid form, a clearly marked bid and a cashier's cheque for the amount the terms of that sale set. According to the Treasury's answers, it must arrive by 5:00 p.m. one day before the sale unless the terms of the sale say otherwise. Written bids are not disclosed before the auction, and the cheques of unsuccessful written bidders are returned by certified mail within 5 business days.

Disputes over who made the final bid are settled in one of two ways under the terms: by reviewing the video recording of the sale, or by offering the property again.

No buyer's premium, and who pays what at closing

A buyer's premium is a percentage added to the winning bid and paid by the buyer. The Treasury's answers state that there is no buyer's premium at its real property auctions. In the worked example above, a winning bid of US$400,000 is a purchase price of US$400,000.

That does not make the bid the full cost. The General Terms of Sale divide the rest as follows.

• Closing costs. Transfer taxes, documentary stamps, recording fees and escrow fees are paid by buyer and seller according to the custom of the county where the property stands, unless the terms of the individual sale say otherwise.
• Taxes. The buyer pays the state, county and local taxes specified in the flyer or on the auction page.
• Title insurance. It is at the buyer's expense, with one exception noted below for some special warranty deeds.
• Inspectors. A bidder may bring a property inspector to a scheduled open house, at the bidder's own cost.
• A broker. Any fee is between the bidder and the broker.

The sale is for cash. The government finances nothing, and the Treasury says a buyer who fails to obtain a loan is not released from the obligation to close.

Closing in 45 days, and what counts as default

Full payment is due by the date given in the sales flyer or on the auction page. The General Terms of Sale require closing within 45 calendar days of the government signing the sales contract; the Treasury's answers describe the same period as usually running from the sale. Closing may take place sooner by mutual agreement. Only the seller may extend it beyond 45 days, at its own discretion. The final payment may be made by bank wire as well as by cashier's or certified cheque.

Default is defined broadly. Under the terms, missing a deposit, missing the final payment or missing any deadline is a default. The contract may then be cancelled, the buyer loses all rights to the property, title stays with the government and the deposit is forfeited.

In the worked example, a buyer who paid US$25,000 and US$15,000 and then missed the US$360,000 balance would lose the US$40,000 paid, and the property.

The sale does not necessarily start again. The terms create a conditional contract with the back-up bidder. If the high bidder defaults, the back-up bidder becomes the high bidder at the price of the back-up contract and must pay within three business days of being told. Liquidated damages apply to the back-up bidder as well. If the high bidder performs, the back-up bidder's deposit is sent back once the government has approved the high bidder, received that bidder's deposit and received the signed back-up contract.

The government has its own exits. Besides the cancellations for ineligible bidders, the terms let it cancel and refund the deposits if a legal misrepresentation is found before final closing. They also warn that collusive bidding and other practices that eliminate competition may lead to criminal, civil or administrative action. The contract is governed by the general terms, by any special terms of the auction and by part 162 of title 19 of the Code of Federal Regulations, and an oral interpretation binds nobody unless the Contracting Officer agrees to it in writing.

What title a Treasury buyer receives

The Treasury says that, unless stated otherwise, title is conveyed by a Government Deed and the government pays the back taxes, the liens and the other encumbrances of record. The terms of each sale identify which of three deeds applies.

Clear title is not a promise about the building. The terms sell every property "AS IS" and "WITH ALL FAULTS", a phrase they extend to building-wide violations, fines and penalties, and the government gives no warranty of quality, condition or habitability.

Inspection before the sale is what the terms urge on every bidder. Access is confined to scheduled open houses unless the contractor authorises otherwise, and the Treasury calls those visits the only chance to ask questions before the sale. Choosing not to inspect is not a ground for cancellation. For a property built before 1978, the terms provide for lead-based paint disclosure and leave every cost of abatement or remediation with the buyer.

How the Marshals Service sells real property

The Marshals Service says it holds hundreds of online and live public auctions a year, often featuring vehicles, jewellery and art. Real estate mostly takes another road. According to the Marshals Service, forfeited real property is generally listed with a licensed broker, priced at fair market value and advertised on national property portals and on the website of its Real Property National Contractor. A buyer meets it as a listing, not as a lot.

The rules behind such a sale sit in chapter 9-115 of the Justice Manual, whose page was last modified on 28 January 2026.

• Authority. Section 9-115.100 says the authority to dispose of forfeited real property and to warrant its title is delegated to the director of the Marshals Service under section 0.111 of title 28 of the Code of Federal Regulations.
• No court confirmation. Section 9-115.300 says a forfeiture sale does not require the judicial confirmation that section 2001 of title 28 of the United States Code provides for. A contested interlocutory sale, made before the forfeiture is final, follows that procedure under section 9-115.310.
• The deed. Section 9-115.400 names the special warranty deed, executed by the U.S. Marshal, as the preferred way to transfer forfeited real property. A quitclaim deed may be used in appropriate circumstances, and a general warranty deed only in exceptional ones.
• Title insurance. Under section 9-115.412, a buyer may in special circumstances ask the United States for indemnifications in order to obtain title insurance. If a court finally rules that the United States never acquired valid title, the government refunds the purchase price and the value of the buyer's improvements, with interest. Section 9-115.420 allows a general warranty deed to be authorised where title insurance still cannot be obtained.
• Who may not buy. Section 9-115.500 prohibits Department of Justice employees from buying, directly or indirectly, forfeited property offered for sale by the department or its agents. The bar covers a purchase by an employee's spouse or minor child, and a written waiver is possible.

The scale of the Justice programme is large. The Marshals Service reports that it received 9,973 assets and disposed of 12,381 in 2025, counting every kind of asset and not real estate alone, and held 24,179 assets on 30 September 2025. In 2025 it distributed US$475 million to victims of crime and claimants and shared US$602 million with state and local law enforcement agencies.

What the published rules leave open

Several points cannot be settled from the general documents, and some are simply not published at that level.

For the Treasury, the amount of the initial deposit, the date for full payment, the taxes charged to the buyer, the type of deed and any wire option belong to each sales flyer. No real deposit figure is quoted in this guide for that reason. The clause on the further online deposit, quoted above, is ambiguous as written; the worked example rests on one reading of it. The general terms say nothing about possession or about occupants after a sale. On the reserve and on the starting point of the 45 days, the two Treasury documents differ in the way described above.

For the Marshals Service, the sources read for this guide give the selling method, the deed and the restrictions on Justice employees. They do not give the earnest money asked on a listing, the way offers are compared, a closing deadline or the consequences of a buyer's default; those would sit in the contract of each sale and are not described here. The Justice Manual does say, in section 9-115.203, that occupants of seized real property should generally be allowed to remain under an occupancy agreement until the final order of forfeiture.

A forfeited property is sold twice over on the seller's terms: the agency that made the case decides whether it is auctioned or listed, and the flyer decides what the bidder must put down.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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