My First Tax Sale! Any tips?

[Miedrn]

I'm going to my first tax sale on September 12 in the county I want to build in.

The parcels are limited this year but there is a nice little area near the Ohio border with quite a few parcels.

I've researched the land and none of them are in wetlands areas, and no superfunds in the area.

The lots are slow to sell because it's in BFE. I don't mind...there is a small town close. I'm thinking the land should be fairly cheap and the beginning bids are $900.  I've heard of quite a few people buying their lots there at tax sales for the minimum bids. I'm looking to do the same. Even if I don't want to live there for the rest of my life, at least it would be better than paying rent. I know the general area quite well.

Over the next few weeks, I'm going to scout out the properties. I'm also going to talk to the township about owner building and try to get a feel for their attitudes.

I'm doing as much research as I can - finding the street addresses from meets and bounds was interesting but I'm enjoying it!

Have many of you been to tax sales? Do you have any words of wisdom for me? I once got carried away at an auction....kinda like the horse races, ya know? ( That red one sure was a pretty loser.) I learned a lesson that day and haven't been back!

Well, I don't want to do the same with land.

I thought about posting this in the "land" part of the forum but I was unsure of the responses to be honest. If it should have been posted there, pardon me.

[FrankInWI]

excuse my ignorance please.  What is BFE?

[PEG688]

excuse my ignorance please.  What is BFE?

From PEG's expanded encyclopedia:
    Acronym :  BFE.    Also see:  Bum (ah) F$ck (ah) Egypt.   A):  Very far removed from the main stream. B): A place far removed/ remote. C): A place no one really wants to move to.

 G/L PEG

[glenn kangiser]

I knew that-- I just didn't expect you two to use it so it threw me off.  Please forgive me for being slow this morning. :-/  Coffee was 2 days old and not working well yet.  Good catch, PEG.

[PEG688]

I knew that-- I just didn't expect you two to use it so it threw me off.  Please forgive me for being slow this morning. :-/  Coffee was 2 days old and not working well yet.  Good catch, PEG.

 Hey I  live there, some times I think Whidbey Isl. is BFE , usually when  driving down to or back from SEATAC

[ShawnaJ]

Hehe Whidbey IS BFE!!!

Youngest was born there, her first winter we had a storm that knocked trees down all over the place, iced up the roads and the ferrys weren't running, no power=no heat for three days, talk about being stuck in the boonies!!

For the military stationed there it IS considered an Isolated Duty Station.

[PEG688]

Hehe Whidbey IS BFE!!!

Youngest was born there, her first winter we had a storm that knocked trees down all over the place, iced up the roads and the ferrys weren't running, no power=no heat for three days, talk about being stuck in the boonies!!

For the military stationed there it IS considered an Isolated Duty Station.

Yes that was , MTL, 1990 or 91 , long winter,  hard fall lot's of rain,  wind , snow , earthquakes , lahar's, valcanco's erupting all around .

Yes iso. duty, or heaven ( if we could stop the folks from coming here) Friggin Calaforinactor's . It all about personel perspective , YMMV

[n74tg]

I read a book about tax sales once.  Seems in some states getting clear title to the land can be a real problem.  Also make sure any pre-existing liens on the property will absolutely be removed.

Nightmare scenario; I heard of one place that sold property in tax sales, but all the original owner had to do was come back and pay up the overdue taxes, and pay like a 15% penalty to the new owner and could get his property back.   He had like three years in which to do this.  

Be careful, careful, careful.

[desdawg]

I have bought many tax sale properties. The laws vary by state so you should bone up on the laws in your state. Sometimes it pays to work the properties before they get foreclosed on for overdue taxes, other times there are bargains after the foreclosure. I purchased an Arizona manual at www.taxsales.com and I'm sure there is one for each individual state. At the time I got mine they weren't very expensive. I haven't looked lately. But the information was all good and valid, unlike some of the stuff put out by different real estate guru's.

[Miedrn]

I read that the laws have recently been changed in Michigan regarding tax sales.

In the PDF paperwork, it says that by order of a circuit court judge, the owners no longer have any right. You can bet that I'll verify that.

A bill of sale is given on the day of the auction then you get a quit claim deed within 30 days.

It does warn you that title insurance may be difficult to obtain. Then I found a web site that will do a certification for around $1000 and you pay nothing if you can't get insurance.

[desdawg]

If the laws have been changed recently then the manual from that website may be out of date. Usually the county treasurer handling the foreclosure will have a title search done in an effort to collect the tax from anyone with a vested interest but that doesn't translate to title insurance. I have always done my own due diligence. I haven't had anything bite me yet. I go to the County Recorders office and research the property and the owner or former owner looking for recorded judgements, mechanics liens, unpaid mortgages etc.

[MIEDRN]

I don't think many people know about the changes. A private company has taken over selling the land for the state and get this - most of it is sold on ebay now.

This county is one that has opted to handle their own.

It may explain why the parcels are limited. I'm not sure how long forclosure takes but once that process is complete, you've lost your land. You can no longer "buy it back".

This may be the start of a new era for me if everything works out well. I've seen houses go for a few thousand and after research, they might make good income properties if in the right area.

We'll see. I'm always looking for ways to supplement the future!

[MIEDRN]

So then Desdawg! If you've done this before, what do I need to be aware of during the auction?

Evidently it's held at the library in conference rooms. It's the plural that's concerning me...is that the way it's usually done? Maybe for separating commercial and residential properties?

I pictured being on courthouse steps...wrong!

[desdawg]

I have never attended an auction. Most of my tax properties were purchased prior to the former owner actually losing them. I have bought some from the County after the foreclosure. The ones that don't sell at the auction proper are placed on a list and anyone can place a bid at any time. That may be one of the differences in AZ vs MI. I currently hold title to about 54 properties and I would say without counting that over half of them came about as a result of me "working" the techniques in the manual I purchased. I have purchased "Tax Lien Certificates" but never wound up getting any properties going that route. I did however get repaid at 16% interest. My two great passions have always been construction and real estate. LOL. I'm a junky.

[Jared]

Nightmare scenario; I heard of one place that sold property in tax sales, but all the original owner had to do was come back and pay up the overdue taxes, and pay like a 15% penalty to the new owner and could get his property back.   He had like three years in which to do this.  

That's not a nightmare scenario, that's the law. And the courthouse/county should let you know that up front. You're right about making sure there are no liens against the place. Here in Delaware County, Oklahoma, they don't do auctions. They just sell land based on taxes owed. You have to contact the owner and give them the chance to buy back (the County has usually already contacted them with a property tax reminder). The address you get to contact the previous owner is the same one that the County used to remind them of the taxes, so usually you won't get hold of them. Then, you have to post an ad in the classifides of the local paper for, I think, three weeks. Then you can start the process of calling the place home after three years has passed.
Jared

[MIEDRN]

The laws recently changed in Michigan in response to counties that are concerned with vacant land, brownfields and the like.

They no longer sell tax leins here and after only two years, if taxes aren't paid, the land is lost by virtue of a circuit court judge.

The land is sold at auction after the state gets first dibs. Deeds are quit claim and you receive them 30 days after the sale.

I have a bit of a problem ethically with this. I can't imagine any land owner would just walk away from land. Still, there are hardship cases where the treasurer of each county has the right to take payments on taxes owed according to the new laws.

In doing research, the majority of these parcels were bought in 2000 for $100. Also, the sewer system is installed by only two companies who have obtained permission from the township. Sounds like a problem to me. We'll see.

There are also no zoning restrictions in the township other than the sewer. Building permits are issued from the county and from what I can tell, all of Michigan uses the IBC 2003 codes, but I'm not honestly sure of the year. It's on the state website.

Thanks for the tips though. I'll take words of wisdom from anywhere I can find them!

[desdawg]

I don't have any ethical problems with tax properties. People who don't pay up place an additional burden on those who do. The highways still need to be maintained, the schools will continue to operate, etc. etc. etc rather a certain portion of the population pays their propery taxes or not. So the people who do pay will pay more to cover those who don't. It takes a number of years before a property is foreclosed upon for taxes and in the interim we all shoulder the burden. I have no problem at all taking a deadbeat out of the loop.

[MIEDRN]

I was thinking of little old ladies that through no fault of their own is losing their land.

I guess that happens infrequently though, wouldn't you think?

I needed a reality check!

[glenn-k]

Reality check coming up--

Some little old ladies--maybe ---but,

A nurse wouldn't miss paying her taxes for that long.  

Being married to one, I was going to say "Nurses are too **** [detail oriented] to miss paying their taxes for that long.", but I thought better of it---- don't want to get anyone excited at me. :-/

[Sassy]

You wouldn't want a nurse who wasn't "detail oriented" or you might get the tubes & needles that were meant for someone else!  

[MIEDRN]

Yeah!

We are pretty deTAIL oriented, aren't we?

[MIEDRN]

or somewhere else! LOL

[glenn-k]

I was so afraid you were going to want to give me a big spanking over that one, I edited it about 3 times.

[Sassy]

I was thinking of little old ladies that through no fault of their own is losing their land.!

You aren't so far off the mark, MIEDRN

The Threat of Rising Property Taxes

by Ron Paul

In recent weeks I've written about how inflation is alive and well, especially when it comes to the cost of housing, energy, gas, and education. But perhaps the most worrisome type of inflation comes in the form of steadily rising property taxes.

Property taxes keep going up for most Texans, and people living on fixed incomes are especially concerned. They often find their homes being reassessed every year at values far beyond what they originally paid. So an annual property tax bill that once was a manageable $500 or $700 might now be $1500 or $2000.

Of course Texas tax laws are made in Austin, not Washington. Assessments are made at the county level. And the Texas legislature recently passed HB1, which does provide some real property tax relief over the next three years.

But as a Texas taxpayer myself, I would like the state legislature to consider an additional proposal.

Specifically, end the practice of annual assessments. Properties should be reassessed for tax purposes only when sold or ownership is otherwise transferred. The current system is terrifying for seniors forced to pay more and more each year, with no idea where they will find the money. And unlike other bills, property taxes must be paid or else one's home can be taken away. My office hears from seniors who may have no choice but to leave Texas altogether because they cannot live with the uncertainty of arbitrary property tax increases. They literally fear losing their homes.

At the federal level, Congress can act now to provide relief to those paying high property taxes. Although property taxes are deductible on your federal tax return, the current rules require taxpayers to itemize to take the deduction. Many people have a hard time paying $2,000 or $3,000 in property taxes, but they don't have enough other itemized deductions to exceed the standard deduction.

I introduced HR 5860 to address this problem. This legislation creates an "above the line deduction" on the first page of your 1040, meaning you can deduct every penny of your property taxes without itemizing and still enjoy the full value of your standard deduction. Even taxpayers using 1040A or 1040EZ forms can take the deduction. This means average and lower income taxpayers can take the same deduction for their property taxes that high-income taxpayers with complex deductions now enjoy.

Property taxes are only one piece of the puzzle. Overall, most Americans hand over at least 40% of every dollar they make to government at some level. The appetite for your tax dollars – whether at the federal, state, or local level – will continue to grow year after year unless we begin to rethink the proper role for government in our lives. If you think you've been squeezed for every last drop of taxes, demand that both your representatives in the statehouse and Washington do something to address spiraling property taxes.

August 9, 2006

Dr. Ron Paul is a Republican member of Congress from Texas.

[MIEDRN]

I'm in the process of doing the due diligence for these properties now and a few interesting things have surfaced. I haven't had time to go to the court house but you can bet before I bid that I will.

The township has only two "approved" installers for the sewers and that tips me off to possible problems in the future. Seems they could charge what they wanted and it raises a red flag. I'm going to give them a call as well.

Besides attention to detail, being a nurse has taught me not to take things at face value and this is one of the situations where it comes in handy!

You'd be amazed at the info for these properties that's available online!