Tax Sale

19 Replies

Hello!  I have a question.  My husband and I are thinking of attending a tax sale of properties at the end of Sept.  WE have never been to one.  Anyone have any advice?  Does it come with a lot of risk?  Is it a bidding war?  We are just trying to decide if it is worth our time.  

Originally posted by @Jennifer Pletcher:

Hello!  I have a question.  My husband and I are thinking of attending a tax sale of properties at the end of Sept.  WE have never been to one.  Anyone have any advice?  Does it come with a lot of risk?  Is it a bidding war?  We are just trying to decide if it is worth our time.  

Attend a few of them for the learning experience only. After you feel comfortable and have learned plenty then become a participant. Also check out some blogs here on BP about tax lien/ deed sales.

Kudos,

Mary

Thanks!  Where do I find the blogs?

Both Myself and @Jerry K.   write a lot about tax sales here and on my own site. Jerry has written many blog posts under the learn tab above - member blogs. 

Generally tax sales are safe - if you know the rules. Some areas competition is very tough some not so much. In my area, many national bidders bid based on assesed value but the assesments are often way high so they are bidding more than the properties are worth.

Thanks!!  I would love to read some of the things you have written Ned.  I think it would help me decide.  Where we invest is a low income area and a small town (less than 8000 people).  What I can't figure out is how far above the taxes owed these properties will go for.  For example - most owe taxes around $2000 to $3000.  IS that where they will start the bidding?  The only information that was on the site for our area (Fayette County Pennsylvania) is that all sales are final on the TAx Sale date and all bids must be made in cash and that the owners will not be allowed to redeem their property after the sale.

PA has different rules across the state. You need to know the specific rules for your area.  I took a tax sale attorney out to breakfast once and he told me about everything I needed to know. You can also look up the statutes and read through them but that is dry reading and may take quite a bit of interpretation. 

Generally all auctions start at the taxes owed. However some areas are so competitive the jump up rather quickly.

The only way to know what people bid is to participate. You will learn from the experience even if you do not buy any properties.

It sounds like it is a tax deed sale. Make sure you know what you are biddng on and go out and check out the properties ahead of time. Keep in mind you can't trespass but you can drive by.

Thanks!  Yeah - the houses are in Fayette County in PA.  I figured they were different everywhere.  We can see all the the house pictures and info online and I know the areas well.  The catch is - we don't live in PA.  We live out of state - our families live there.  We were going in for the sale, so Iwon't have a chance to talk to anyone face to face ahead of time.

Since you are looking at Pennsylvania tax sales, I will summon @David Krulac  who does training on that sort of thing ...

You can also search for "upset sale" and "judicial sale" and you will find a number of Pennsylvania specific posts.  I hate repeating myself too many times :)

@Jennifer Pletcher  

Its a difficult process and 65 of the 67 counties operate under the same law, however there are many differences between counties.

The upset tax sales transfer with ALL mortgages, liens, judgments, IRS liens, state liens, etc INTACT.  All sales require full payment at the sale, some don't take checks, some don't take cash, some required certified funds. 

It is the most hazardous way to buy real estate, BE CAREFUL.

Thanks!  I have been reading what you have said on other areas of the forum, and I have decided this is not for us.  We have one property right now - a Triplex - and she is handful enough!  Thanks for all of your advice.

Take care

Jennifer Pletcher

@David Krulac  

I know I am resurrecting an old forum here, but I am looking to learn more about the tax sales in PA. I am out in Chester County, PA. Do you have any good resources or nuances you can speak of in this area?

In addition, what are the major risks or hiccups you can run into when dealing with the tax sales? is it safe to say the mortgage would transfer with the property when it is sold in a tax sale?

@Mason H.  

At PA upset tax sales, ALL liens, mortgages, judgments, whether recorded or not transfer with the property to the new owner.  It is the most difficult and treacherous method of buying real estate.  Check out the DIG real estate investors group in Philly area.

Thanks, @David Krulac  I'll be sure to check out the DIG group. 

@Mason H.  - DIG has a website at 

http://digonline.org/

If you send me a colleague request with a brief note, I can send you back a message with some more info on DIG. I just pull up a PM I already sent to somebody else and copy and paste back as a reply to you to make my life easier ;)

@David Krulac Six months ago, I put an offer in on a commercial property in Harrisburg, PA. Our offers went back and forth but never reached an agreement (due to the seller's attorney not providing us enough due diligence time - the property has a lot of risks associated with it and needs to be totally gutted). That property was just served a notice that it will be sold at the upset sale this fall. The property is still on the market but I'm wondering, if no offers are made at the upset sale, is it still able to be on the market after this first public auction takes place? With everything I've read about upset sales, I'd rather purchase it conventionally, but I'm concerned we're running out of time to do so. Thanks in advance!

if not bid on at the tax sales, you can buy it after the sale.

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@David Krulac reviving old thread, but I have a similar question. I'm in Georgia.

If I see in the County Website that a house has delinquent taxes from 2016, how do I know if that property has already been sold or auctioned at a tax sale? and if I contact a seller that is behind on his property taxes and they want to sell, is there any risk for the buyer that the house has already been auctioned at tax sale, or can I buy it from them and pay off their tax debt?

At the county website it listed the current owner and the date they purchased, if it is a year or more ago, they probably still own the property.  at this preliminary stage you can presume so.  Here tax sales are usually held in September by state law and in most counties are only held once a year.  I've never seen that problem that you propose, but I've only been doing this 30 years!  Prior to settlement there will be a complete title search and you can be assured by your title insurance policy that the people you are buying from are in fact still the owners.

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