Tax auction?

[DrPizza]

Anyone ever buy any property at a tax auction before, or know what's done to do so? I'm looking at a particular vacant plot of land; no structures on the land. All I know is that the county would provide me with a Quit Claim. The property is sold "as-is", and the county says nothing about liens on the property, etc.

And, I have to submit a bid... that'll be the tough part, but I'd think any advice would be very geographic area specific. E.g., what percentage of the full market value should I bid? I mean, if I could bid 50% of the full market value and get the place, then it'd be foolish to bid 100%.

Will be paying cash for the property; financing is not an issue.

 

[gorcorps]

Bidding should be the easy part... how much would you be willing to pay for the land and be okay with it? To my knowledge you don't get to see the other bids, so if you win you won't really know how much less you could have paid and still won.

You bid what you're willing to spend on it. If you lose, then fine because it's too expensive. If you win, perfect because that's how much it was worth to you.

I know this sounds overly generic and not very helpful, but it's really the best thing I can say about auctions.

 

[highland145]

Here, it is an auction. Top bidder wins. Winner gives the $$ to the county to "hold." Original owner has 1 year to pay the bid + interest to the winner or lose the property.
3% interest month 0-3
6% interest month 4-6
9% interest month 7-9
12% interest month 10-12.

There is a system in place to keep bidders from bidding it up to make bank on the interest but I don't remember what it is.

 

[DesiPower]

Are these the auctions that take place on the steps of the courthouse? Man, that's a difficult one, a friend of mine tried a few times and said it was next to impossible. There are property agents and investors whose full time job it to do this. They are there all day and know which ones go on auction when, so they run there do the bidding. Its not for one time dealers like us, but a agent who deals with these might be able to help.

There are booklets and websites that will tell which property will go on auction where and when but it requires a pro to decipher, that's what I hear...

 

[DrPizza]

I have most of the information in hand at the moment - sealed bids, accompanied by 10% deposit. (I'm going to presume it's a refundable deposit if I don't win; but haven't actually seen that yet.) I have to have the bid to the county office by 5:00pm on May 2. Bids are opened May 3. There's nothing an agent or anyone else has on me, except perhaps for the experience to know what size bid will win - bidding enough to win, but not too much; maximizing profits (for the agent). I'd just like (I think) that particular chunk of property. Haven't actually seen it yet, except on the tax map & now google satellite view. About to drive over and take a look around.

 

[OCGuy]

You would obtain Title Insurance. If you wanted to PM me the address of the land (APN is better), I could run a quick title check for you, but that is your call.

The tax agency would not be able to sell the land if their were any known liens on it.

 

[jagec]

I've thought about it a few times, but never actually done it. My understanding is that you really have to know your state laws and make sure that you won't be responsible for any other liens on the property, or cleanup costs if it turns out to be a toxic waste dump, etc.

I would imagine that straight-up land would be safer than buying a building, since there would be fewer bids and fewer things that could go wrong.

I guess that wasn't much help, so here's your free bump that will allow someone more knowledgeable to see this thread.

 

[DrPizza]

Just got back from looking at the property. Nice.
<removed.>

 

[Hayabusa Rider]

Pardon the stupid question but have you checked zoning for your purposes?

 

[Blackjack200]

Here, it is an auction. Top bidder wins. Winner gives the $$ to the county to "hold." Original owner has 1 year to pay the bid + interest to the winner or lose the property.
3% interest month 0-3
6% interest month 4-6
9% interest month 7-9
12% interest month 10-12.

There is a system in place to keep bidders from bidding it up to make bank on the interest but I don't remember what it is.

Usually the way it works is the interest rate is bid downward. In some states it starts at 17% and can get bid all the way down to 5 or 6% if the property is desirable. The winner then pays the municipality the outstanding property taxes and can collect on that amount from the owner.

What the OP is talking about sounds like a sheriff's sale for foreclosed properties, which is a little different.

 

[MichaelD]

Just got back from looking at the property. Nice.

Almost 3/4's of a square mile is SMALL? I would build my Fortress of Solitude on a piece of land like that and still have room for a bowling alley, shooting range and go-kart track.

 

[KLin]

Almost 3/4's of a square mile is SMALL? I would build my Fortress of Solitude on a piece of land like that and still have room for a bowling alley, shooting range and go-kart track.

3200 square feet is nowhere close to 3/4 of a square mile. of course, you probably meant acre.

 

[MichaelD]

Man, do I suck at math. :'( I had the "5,280 feet" thing in my head, saw 3,200 feet and well...fine, I'm leaving now.

 

[jagec]

Almost 3/4's of a square mile is SMALL? I would build my Fortress of Solitude on a piece of land like that and still have room for a bowling alley, shooting range and go-kart track.

3200 square feet is only a little bigger than the average new single-family home these days.

 

[MichaelD]

Yeah, I know. I have reading comprehension problems this evening. I'm going on my third 16-hour workday this week. :wall:

 

[JEDIYoda]

Pardon the stupid question but have you checked zoning for your purposes?

That would be a tough one if it was zoned for massage parlors only........sort of I think they call it MPO zoning!!

 

[Hayabusa Rider]

That would be a tough one if it was zoned for massage parlors only........sort of I think they call it MPO zoning!!

At first glance it seems like a dumb question but he and I live in western NY and getting screwed is an everyday occurrence. Granted we have different local governments, but someone I know just got shafted beyond all reason so I asked anyway.

 

[SearchMaster]

I don't think he means 3200x3200

3200 square feet is pretty small for a lot. That's 56'x56' if it's square.

 

[lupi]

I went to several auctions before, surprised how quickly stuff gets big up or the minimum bids on non-government auctions.

 

[alkemyst]

Pardon the stupid question but have you checked zoning for your purposes?

Very good question, so many have ideas on cheap land where they will just put up a trailer and build as they go, only to find out 1) trailers aren't allowed and the home size required is greater than they can afford.

OP, all auctions are different. You will need to contact them. Sometimes there is a screening process and many times you will be required to put up a deposit ahead of time.

Also there are different rules regarding title issues should there be any.

There is no way to know for sure, but the one thing that is certain; auctions are a lot more risky than shopping property the normal way.

 

[Zenmervolt]

You would obtain Title Insurance. If you wanted to PM me the address of the land (APN is better), I could run a quick title check for you, but that is your call.

The tax agency would not be able to sell the land if their were any known liens on it.

Title insurance on a quitclaim deed? Property law isn't my general area of practice, but I was pretty sure that quitclaim deeds had no warranty of title.

I mean, I'm sure that the county is just doing it to cover themselves in case there's an adverse possession claim or something similar but it seems like title insurance for a quitclaim deed would be more hassle than normal if it were possible at all.

ZV

 

[JulesMaximus]

Are these the auctions that take place on the steps of the courthouse? Man, that's a difficult one, a friend of mine tried a few times and said it was next to impossible. There are property agents and investors whose full time job it to do this. They are there all day and know which ones go on auction when, so they run there do the bidding. Its not for one time dealers like us, but a agent who deals with these might be able to help.

There are booklets and websites that will tell which property will go on auction where and when but it requires a pro to decipher, that's what I hear...

They probably have access to even more information than that I suspect.

 

[DrPizza]

Very good question, so many have ideas on cheap land where they will just put up a trailer and build as they go, only to find out 1) trailers aren't allowed and the home size required is greater than they can afford.

OP, all auctions are different. You will need to contact them. Sometimes there is a screening process and many times you will be required to put up a deposit ahead of time.

Also there are different rules regarding title issues should there be any.

There is no way to know for sure, but the one thing that is certain; auctions are a lot more risky than shopping property the normal way.

Yep. I answered Hayabusa via PM. If I get this parcel, the adjacent parcel is the same size. I'll build a very similar sized structure. If I want to, I can put a camper there instead. Though, there isn't room for both a camper and building a cottage (plus a vehicle). 5 minutes from home though, so it'll be one or the other. The bid process is easy; mentioned above. I've already printed out my bid; it's filled out, except for how much I'm going to bid. It must be accompanied by a 10% deposit. If my bid wins, I have 10 days to pay the balance, including back taxes on the property. Planning on paying cash (cashier's check for the deposit though.) A couple of people have PM'd me to help out (Thank you again!) There is one larger title issue to be aware of, related to the status of the former owners. If it works out, it works out. If not, it's not a big deal to me.

 

[Meghan54]

Dr. Pizza, wouldn't you rather attend the public auction for the property vs. doing the sealed bid process? From what I've read about your county's tax auction on May 3, the sale will be a public auction with sealed bids being accepted for those who cannot attend.

This will be an auction sale. However, for those unable to attend the auction, the County Treasurer will accept sealed bids up to
5:00 PM on May 2nd, 2014.

Please note that the highest sealed bid, per property, will be considered the MINIMUM opening bid for such parcel at the public auction.

This was taken from the instructions for the sale on May 3rd, in what I believe is your county. Personally, I'd attend the auction live vs. doing a sealed bid. You'd be in much more control of your situation and bid.

 

[DrPizza]

Sweet! Thank you so much for finding that. Not sure how I missed it. I guess I simply presumed that with sealed bids, that it was only a sealed bidding process. I knew that in the past, it was a public auction like that. Of course, that opens up the possibility of a bidding war if there's someone else, but I'm rather experienced at auctions & don't get sucked into spending more than I want/know how to play other people like it's a poker game.