I’ve never done a delinquent tax auction so I have questions.
Our county is holding an auction that allows all interested parties to review the highest bid of each round of bidding and adjust their offer. This continues until there is only one bid (highest) and sold at that price.
This can go on for more than a year on each property. The problem I have is that I can only review the exterior of the properties… some in terrible shape with evidence of utility-free occupation. I’m pretty sure the mechanicals are destroyed or gone to the scrap dealer.
I’m really not afraid of the work, but have little in the way of a benchmark to justify price/risk/reward.
Have any of you found these to be reasonable restoration pursuits for eventual sale or rent?
Liberty = Freedom from unjust or undue governmental control.
American Heritage Dictionary
Replies
One thing that you need to find out is exactly what do you get if you are the wining bid.
You get an immedate (within a few weeks) free and clear deed? Or do you note on the property that you can foreclose on in a few years if they owners don't pay up, or do you get a receipt that says that the property is yours, but that they can still redeam it for a period of time (6-12 months).
Tax sales differ a lot from state to state.
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
A quitclaim deed is issued upon receipt of fees, back taxes and bid price.Liberty = Freedom from unjust or undue governmental control.
American Heritage Dictionary
A quitclaim deed is issued upon receipt of fees, back taxes and bid price.
Be careful - a quitclaim deed conveys "all interest the seller may have in the property". The provervial sales of the Brooklyn bridge are done with quitclaim deeds.
You may be buying full ownership, or you may be buying nothing, or the obligation to pay off liens.
Also, specifics vary from locality to locality.
Is there a real estate investors club or something like that locally where you could find some folks familiar with your local situation? Maybe they could give you better answers.
I am surprised that it is a quitclaim deed and not a Sherif's deed or similar court or adminstrative deed.Around here 95% of the deeds are either quitclaim deeds or warantee deeds. I have seen a few adminsative deeds (don't remember what they where called) for "foreclousers" (we are in a trust deed state and don't have clasical foreclousures). And in those the trustee list the notices and publications that listed the default and affirms that they meet the legal requirements.Have not seen a deed from a tax sale so I don't know what they look like..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
A quitclaim deed just says, "you get whatever interest I have, if anything." Either pay someone to do a title search or do your own. You take title subject to encumbrances that are senior to the tax taking. Any mortgage is immediately due. Also, keep in mind that there may be other title issues that don't get revealed by an examination at the registry of deeds or whatever it is called in your locale, like the adverse possession claim of the people next door. Also, make sure the owner doesn't file bankruptcy the minute before the sale, which is quite common. If the sale is stopped, no problem, but if it goes through anyway, big problem.
My current understanding of the situation is that these properties have no liens (mortgages) against them. I also believe (and will check) that the tax burden is the first lien holder, then first mortgage, etc.
I will pay for the title searches as cheap insurance.
Thanks all!
Liberty = Freedom from unjust or undue governmental control.
American Heritage Dictionary
I see that TN is a tax deed state.But they have a right of redemption for 1 year. So that means you need to sit on the property for a year before you can do anything with it.http://www.taxforeclosuresales.com/tax_deed_sales/tax_deed_profiles.html#TennesseeThis is a generic answer, but indicates that some states only issue Quit claim deeds."In most cases, the jurisdiction will only provide a quitclaim deed at the sale, which is usually insufficient for title insurance. Therefore, a "quiet title" action must be filed in court to obtain an insurable title."http://en.wikipedia.org/wiki/Tax_deed_saleI found this from Knoxville, but I assume that it is common throughout the state."The form of conveyance will be a Clerk and Master’s Deed. It is the responsibility of the purchaser to contact the Clerk to request the deed, as provided in the Order of Confirmation. It is also the responsibility of the purchaser to record the deed in the Knox County Register of Deeds Office. The purchaser should be prepared to record the deed at the time it is delivered by the Clerk. ""The new owner of the property will not receive a deed to the property until one year after the Order Confirming Sale. The deed is called a “Clerk and Master’s Deed.†Any issues regarding personal property left on the premises by the original owner shall be settled between the new owner and the former owner. ""If you are interested in a parcel, it is your responsibility to determine its actual location and condition. The property is sold subject to its current condition AS IS without warranty. The City of Knoxville and the Clerk and Master of the Chancery Court make NO WARRANTIES, expressed or implied, relative to the title, condition, use, or any other matters involving any property in this tax sale or any other tax sale. No new surveys of the properties were made. Each property description was taken from the appropriate deed recorded in the Register’s Office for Knox County and there is no representation or warranty made with regard to the accuracy of the descriptions.The form of conveyance will be a Clerk and Master’s Deed. It is the responsibility of the purchaser to contact the Clerk to request the deed, as provided in the Order of Confirmation. It is also the responsibility of the purchaser to record the deed in the Knox County Register of Deeds Office. The purchaser should be prepared to record the deed at the time it is delivered by the Clerk. "http://www.ci.knoxville.tn.us/ptax/taxsale.aspAlso it indicates that there are additional tax that have accured on the property, but since they are only "slightly" late they are not included in the sale, but still need to be paid by the buyer..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
WOW! Great info. Thanks for all the effort!
I'm still interested in whether anyone has suffered through this type of sale and profited from it.
Thanks all!Liberty = Freedom from unjust or undue governmental control.
American Heritage Dictionary
http://www.professorprofits.com/states/state.php?name=Tennesseehttp://www.tennesseetrustee.com/node/166This indicates that other liens are cleared after the right of redemption..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Hackinatit
The fundamentals still apply. Location, location,location.. a good property in the wrong location is a liablity. period..
a poor property in the right location is an asset..
Do not fall into the trap of being a price buyer.. sure failure or at best poor performance.