Limit On Bids For Tax Certificates?
I have attended a tax certificate sale here in Georgia and am planning on bidding at the next one. In my county, the bid amount plus 20% is required from the owner to get the lien removed. The owner has one year to redeem. My question is this: Say the property is worth $100,000 with a mortgage of $80,000 and taxes are $1000. If the bidders went wild and bid it up to $50,000 the owner would have to pay 50,000 + 10,000 (the 20% of the bid) = $60,000 to get the lien removed. Of course the property is only worth 100K so the orginal owner, who still owes 80K on his mortgage, would be foolish to pay off this lien. The winning bidder then gets to foreclose and take possession of the property after the 1 year period. If that is truely how it works then why do most bids only go a few thousand over what the overdue taxes are? The highest I have seen the bidding go was $6,500 on a tax bill of $865 for a property that may have been worth $140,000. Thanks for your input.
most bidders do not want to tie up that much money in one deal. you need to check i believe in ga. the 20% is not given on the overbid. the 20% is not a per annum rate but rather a penalty. in other words if your tax deed is redeemed after the first month the penalty is still 20% or a 240% annual return or if redeemed after the 12 month it is still 20% percent or 20% annual return. where in your area do you find online info for ga. tax sales. i plan to attend some of ga. sales i live in tennessee......kenmax