The last time I went to a tax auction for LA county, the bidding stopped at the minimum asking price and then the properties came up for auction again at very end for one half of the amount owed on the property then the bidding went up from there. If no one bid on the property at half price, they just relist it for the next auction. I'm not sure what the case is for your particular auction as I've only been to LA Co.
That would depend upon state laws and local jurisdiction customs or decisions.
Call up the office that is going to do the auction and ask them the question. Study the state statutes related to the collection of delinquent property taxes. Every state has different laws.
after 0 % then you start to pay a premium. i've seen people pay thousands of dollars on top of the lien certificate. why? well the word was out that the owner had died and there was no family to redeem.
Thats exactly right. The most common setting where I see individuals going after 0% interest or even paying a premium once the interest bidding has reached 0%, is when they are sure the property is unlikey to undergo redemption.
Once redemption is out of the picture then it is a property ownership situation. However its not always a good idea to do this for serveral reasons:
1) You must check with state statutes since as others have mentioned each state is different.
2) It is not always easy to be absolutely sure that the property will not be redeemed. For example, in many states another tax lienholder can redeem the property. Sometimes the rules specify that this must be a 1st year lienholder. While in other states it could be any subsequent tax lienholder.
NOTE: A subsequent tax lienholder is someone who bought an earlier or later year tax lien on the same property.
3) In many states an heir will have the ability to redeem the property. So although the property owner may have died you cannot be sure that a family member or someone with a future interest will not redeem.
4) You must factor in your foreclosure costs. In some states an adminstrative foreclosure proceeding is used in which the county will handle the foreclosure of the tax lien. If the state does not use this type of system then you must foreclose on the lien yourself with an attorney. Since this is an additional cost, a bidder who is paying a premium on a parcel must take this into account.
The moral of the story is that you must know your state laws well. It is also very important to understand that once you focus on property ownership in tax lien certificate states then you have to be aware of the myrid of research issues relating to IRS liens, FDIC liens, Association fees, environmental issues, and others issues. So do your research and understand the state laws in your investment jurisdication!
Quote:
On 2004-04-23 09:40, lp1 wrote:
after 0 % then you start to pay a premium. i've seen people pay thousands of dollars on top of the lien certificate. why? well the word was out that the owner had died and there was no family to redeem.
In Florida that will do you no good as all properties that have unredeemed certificates will go to auction. There you will be in no better position than anyone else and will just end up competing with everyone else.
The last time I went to a tax auction for LA county, the bidding stopped at the minimum asking price and then the properties came up for auction again at very end for one half of the amount owed on the property then the bidding went up from there. If no one bid on the property at half price, they just relist it for the next auction. I'm not sure what the case is for your particular auction as I've only been to LA Co.
Best of luck at the auction. :-D
slowhand--(IL)----------------
That would depend upon state laws and local jurisdiction customs or decisions.
Call up the office that is going to do the auction and ask them the question. Study the state statutes related to the collection of delinquent property taxes. Every state has different laws.
Good Investing************Ron Starr*************
The first person who yells "0"
after 0 % then you start to pay a premium. i've seen people pay thousands of dollars on top of the lien certificate. why? well the word was out that the owner had died and there was no family to redeem.
Thats exactly right. The most common setting where I see individuals going after 0% interest or even paying a premium once the interest bidding has reached 0%, is when they are sure the property is unlikey to undergo redemption.
Once redemption is out of the picture then it is a property ownership situation. However its not always a good idea to do this for serveral reasons:
1) You must check with state statutes since as others have mentioned each state is different.
2) It is not always easy to be absolutely sure that the property will not be redeemed. For example, in many states another tax lienholder can redeem the property. Sometimes the rules specify that this must be a 1st year lienholder. While in other states it could be any subsequent tax lienholder.
NOTE: A subsequent tax lienholder is someone who bought an earlier or later year tax lien on the same property.
3) In many states an heir will have the ability to redeem the property. So although the property owner may have died you cannot be sure that a family member or someone with a future interest will not redeem.
4) You must factor in your foreclosure costs. In some states an adminstrative foreclosure proceeding is used in which the county will handle the foreclosure of the tax lien. If the state does not use this type of system then you must foreclose on the lien yourself with an attorney. Since this is an additional cost, a bidder who is paying a premium on a parcel must take this into account.
The moral of the story is that you must know your state laws well. It is also very important to understand that once you focus on property ownership in tax lien certificate states then you have to be aware of the myrid of research issues relating to IRS liens, FDIC liens, Association fees, environmental issues, and others issues. So do your research and understand the state laws in your investment jurisdication!
Quote:
On 2004-04-22 18:38, slowhand wrote:
My question is if the bidding gets down to zero who wins the bid?
Generally speaking, the first one to bid the lowest amount would get the certificate.
Quote:
On 2004-04-23 09:40, lp1 wrote:
after 0 % then you start to pay a premium. i've seen people pay thousands of dollars on top of the lien certificate. why? well the word was out that the owner had died and there was no family to redeem.
In Florida that will do you no good as all properties that have unredeemed certificates will go to auction. There you will be in no better position than anyone else and will just end up competing with everyone else.