Purchasing a house before it is up for a Tax auction

7 Replies

I’m looking at the house that has been foreclosed by the city due to delinquent unpaid taxes. The owner inherited the house from his parents and stopped paying taxes three years ago. Tax auction is coming up and I’m interested biding on the house. I had my real estate attorney do a title searching and check if there are any judgments or lien against the owner of the house. The owner (I’m in contact with) would consider selling the house to me directly. When I asked at the city treasury dept if I can pay off delinquent taxes (3 weeks before auction date) I was told it is too late and the house will be auctioned  off. 1. Is there anything that I can do to purchase the house before it is auctioned off? The owner would sell it directly to me.                                       2. The seller has judgements against him, but they were awarded before he inherited the house. My attorney said there are no liens on the house. If I purchase the house can these agencies come after me a new owner since there were judgments filled against the prior owner. As always thank you for your advice. Mal

I would check with your attorney I find it hard to believe you cannot pay the tax's up to the day before the actual sale. in every state I work that is the case.. its worth a call .. owners of real property are always last minute Louis paying tax's

when you follow these sales you will get all excited only to have the one you want to bid on redeemed day before the sale.

If you have a contract to purchase would unpaid taxes be paid at closing? Worth asking your attorney. 

Great. The property is located in New York State. City said the owner had until July 4th to pay taxes and the auction in the beginning of November.

The timing of judgments is not the issue. Confirm with your attorney whether or not judgments attached as a matter of law automatically when title vested in your seller.

That’s how it works in all the states around here.

If there are no other liens or judgement from lenders, it is reasonable to state you two can go to title and close a deal.  If the title & escrow is wrong and home gets sold at auction, their insurance can regroup.

Good luck,

@Mal K.

NY State is a judicial state. The house has already been foreclosed on. Once the judgement is issued title is transferred to the municipality for sale. For tax foreclosures, the owner has a very small window to redeem the property after the judgement is issued (30 days after the foreclosure notice is mailed). Since the owner blew passed that date already, you can no longer buy it from the owner directly. Nor can you buy it from the municipality before the auction, they want an arms length transaction at auction to get the maximum sales price for the property.

The only way the owner could do something at this point is petition the court to reopen the judgement case. Considering the owner hasn't paid taxes in several years, he probably won't bother with a legal battle.

Originally posted by @Christopher Phillips :

@Mal K.

NY State is a judicial state. The house has already been foreclosed on. Once the judgement is issued title is transferred to the municipality for sale. For tax foreclosures, the owner has a very small window to redeem the property after the judgement is issued (30 days after the foreclosure notice is mailed). Since the owner blew passed that date already, you can no longer buy it from the owner directly. Nor can you buy it from the municipality before the auction, they want an arms length transaction at auction to get the maximum sales price for the property.

The only way the owner could do something at this point is petition the court to reopen the judgement case. Considering the owner hasn't paid taxes in several years, he probably won't bother with a legal battle.

I missed that little tidbit (foreclosed) in the description.

Interesting that our poster's attorney is not thinking along those lines, or it would seem.

Anyway, if that is the case, those junior judgment liens would presumably have been wiped out by the foreclosure. And there would be no sense dealing with the "owner" who thinks he's the owner but no longer is. Sounds like it's time to focus on the tax sale. 

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