Clue me IN!
Hey guys, what is all this talk about Arkansas tax sales? I am an Arkie and so why have I not heard about these great deals? I just read someone from Maryland was obtaining the land commission quarterly papers. Let me know what I am missing? Thanks.
BTW, a new land commissioner just took office here in AR. So, you may need to rerequest the information due to things being lost in the transition.
JMW
Hello fellow Arkansan (or Arkansawyer, depending on which you prefer...). I can tell you that I found out about tax sales because my mom picked up a vacant lot on Beaver lake by paying the delinquent taxes on it.
I did a lot of research, and some of the best stuff I found was on this site. Do a search on tax deed or arkansas.
I'm currently waiting for word back on the house next door. The owners hadn't paid taxes on it since 1996 and it's been abandoned for over 6 months.
Let me tell you how this works as far as I understand it:
When the taxes on real estate become 2 years delinquent, the county sends it to the state for collection. (I think there is a way to start paying deliquent taxes before it goes to state and acquire the property, but I think it's riskier and I don't have any experience in this...). If the state can't collect, they auction the property off in a regular tax auction in Little Rock.
If it doesn't sell at auction, the state will then accept closed/sealed bids on it. You have to have the parcel number and contact the state land commissioner's office to request a bid form. You have 30 days from the day they mail the form to you to return a bid, or the form is no longer valid.
The form will have the total taxes due, plus a percentage of the accessed value, and any other fees all listed on it, and the total of these numbers is the minimum bid the state will accept. You can add money on top of the minimum bid if you want.
Once the state has received the FIRST bid on a property, the bidding is then opened. There are 30 days from the day the first bid is received until bidding is closed, and the highest bidder wins.
Once the highest bidder is identified, the owner of record is notified and they have 30 days to redeem the property (i.e. pay their taxes). If they don't respond, then you get a letter saying that the property is yours. You have 30 days (are we seeing a pattern here? ) to pay the amount you bid to the state, and then they send you a limited warranty deed.
The limited warranty deed is the kicker, though. All it says is that in the eyes of the state, you are now the owner, but unlike a regular warranty deed, there is no guarantee that someone else out there has some claim to the property and no Title History or anything comes with it.
From what I understand, this means that if there is a mortgage on it or any other liens, you may also be taking on that debt as well. (Somebody correct me if I am wrong). I would think though, that if there is a mortgage on it, the mortgage company will pay the taxes and foreclose on the owners before they will let it go so far as to let the state get it and lose their investment. So your best bet is to research the property yourself and make sure that there is no other creditors out there that can lay claim to it. (i.e. in a bankruptcy case, or something like that).
This part I am not sure about, but I think that the state does try to find out if anyone else has a lien on the property. If there is one, and you have added an amount to the minimum bid, I THINK that they will take whatever is extra and apply to anyone they know of that has a lien. I am not 100% positive about this though. (The property I'm trying to get was owned free and clear, and so I wasn't worried about this detail).
And because the deed you receive is a limited warranty deed, you can't just turn around and sell the property. You have to quiet the title first. (there is a great post about this in the forums!). I have heard that you have to wait 2 years to quiet a state-granted limited warranty deed, but my lawyer thinks that you can do it right away, but don't take my word for it...
That's about all I know - just because of what I'm trying to do. But when you request a bid form, you get paperwork that explains all the rules and regulations.
If you are really interested in delinquent tax sales in Arkansas, contact Lisa Pelton in the state land commissioner's office. She is the one in charge of the bidding for properties that didn't sell at auction, and she is EXTREMELY helpful.
When I contacted her about the house next door, she explained the whole process to me, and even told me that there were already 2 bid forms sent out on the property, who they were sent to, and when they expired. When I sent in my bid, she told me that only one other bid had come in, and who it was from. The only thing she couldn't tell me was how much it was for (of course!!). So I did ask her what she usually saw on the bid forms in general. She said some come in and the bidders have just rounded the min. bid to the nearest dollar, and others add an extra $1000 on to it. That gave me enough information to know that if I wanted to win, I would need to make sure I put enough on to beat those odds (and the min. bid on the property I'm trying to get was only $8700! The county appraised in 2000 at 40K).
Boy - sorry I didn't mean to write a book! And I am by far the least experienced on this site, but I have gotten info just because I'm in the middle of it now.
If you have any more questions, please don't hesitate to respond. I check this site regularly!
Mischki
Quote:
And because the deed you receive is a limited warranty deed, you can't just turn around and sell the property. You have to quiet the title first. (there is a great post about this in the forums!). I have heard that you have to wait 2 years to quiet a state-granted limited warranty deed, but my lawyer thinks that you can do it right away, but don't take my word for it...
Okay, first of all, I just found out that I won the bid!
Second of all, I just talked with Lisa at the Comm. office, and there is a 2 year wait before you can quiet a title on a tax sale. I asked her what the difference between the 30 day redemption period and the 2 year waiting period was, and she said that if the owner comes in and pays the taxes in 30 days, then the sale is voided. But after the redemption period is over, anyone with an interest in the property (i.e. heirs, owners, lienholders) can take me to court to get the property back. In that case I would still get the money back from the sale (whatever I bid on it) but if I make any improvement to the property, that won't be reimbursed. So they recommend that you don't do anything to the property until the two years are up.
Just wanted to add to what I'd already found out.
Love this site!
Mischki
I too am interested in aquiring land that has been foreclosed on by the state of Arkansas. Lisa also sent me the paperwork on the land that I'm interested in. The only problem I have is by bidding I can be held liable for any outstanding liens against the property. Is there a way to tell if there is a lien against the property or do I have to go to an abstract company for this? Can I do a title search myself?. <IMG SRC="images/forum/smilies/icon_smile.gif"> [ Edited by michael28_1 on Date 02/10/2004 ]