Upset Sale in Montgomery County, PA (with a side of intrigue)
I've been reading the forums a bit on the subject of Upset Sales in PA and thought I would try to tie several of the discussions together for the upcoming sale. For this I'd also like to invite in two main contributors of previous like topics to this conversation:
@David Krulac
@Steve Babiak
(can't get the links to work for some reason)
Since I haven't attended an Upset Sale before, I am considering just going to see the process, but also know a couple properties that will be part of the sale. That said, I understand the following:
- Complete a Title search and visual inspection (as possible) on the properties to understand any other issues.
- Register for the sale.
- If successful bidder, I would be responsible to pay the bid amount, transfer tax, recording fee, and deed prep fee. First question- Is the transfer tax based on the appraised value?
- I would become owner of record after Deed has been filed (4-6 months from what I've seen), but also understand that PA has issues in terms of the length of statute of limitations for adverse possession, and insurability of the Deed.
I'm interested in two of the properties on the Montgomery County PA Upset Sale list as they are in my surrounding neighborhood and am actually a casual acquaintance of the Owner (which may not be a good situation, particularly if I were the successful bidder). One property is the residence of the owner. Taxes were half paid in 2012, nothing in 2013, and 2014 has no record of payment. There is a mortgage attached to this property from 2004 that is substantially less than the appraised value. It has not been satisfied or assigned, but there is also no lis pendens on the property.
The second property of the same Owner is commercial. The taxes are in the same situation as the residential property. It had a mortgage, but is noted as being satisfied in 2009. It is part of a larger building and I am not able to assess whether it is in some way a condo, and if so, are they up to date with any fees. The balance of the building is owned by relatives of this owner and occupy one of the storefronts with their RE company, for which this owner also works (as an appraiser for one thing).
So if you are like me, the hair on the back of your neck stands up with that info. I am interested in the residential property as it is an eyesore in the neighborhood. The old saying of buying the ugliest in a great location fits this property, but after reading other posts I know there will probably be difficulties with gaining clear title from an Upset Sale in any sort of timely manner. A flip doesn't seem to then be reasonable, but best to look at it as a buy and hold.
Question is...is there another way? Do we look at this as an opportunity to try and convince the Owner to sell? To add to the intrigue of this situation, the Owner has recently (June) purchased another residence in another township in the county (found as part o my Due Diligence), so they may be looking for an exit strategy for the property listed on the Upset sale. We are late in the game for this years sale, but I am also thinking the bank may step in and pay the lien on the residence, allowing time for discussions with the Owner. From what others have posted, banks step in all the time, but to me that doesn't end the opportunity. Why try and go through all the issues surrounding an upset sale, when you may be able to go through an actual purchase? Since it's not a tax lien sale, but a deed sale, we are ultimately looking to acquire the property anyway.
One thing that I do need- a good RE attorney with knowledge of Deed sales in PA, hopefully Montgomery County. Please pass along any names or PM me.
Thanks for listening if you made it to this point.