Bidding on the tax sale - Baltimore City

[Steph Potter]

Hi all. I am really trying to figure out how to put in a bid on the Baltimore City tax sale (coming up in May). They provide a format for calculating the bid but no real directions with it. I've got a sample of the bid, but want to be sure I'm understanding what I've put together - don't want to get caught with a bill due that's bigger than what I planned.  The house has outstanding taxes (the $7K) with a face value of $100.6K. The way this reads, if I bid $50K and win, the amount I would owe is $8,952. But I'm thinking that I would owe $58,952. Not trying to be thick, just making sure there are no curves here. Thanks for not calling me dumb.

Here's what I'm looking at:

Taxes:		7000
High Bid Premium:
Cash Value:	$100,600.00
40% Cash value ($100,600 x .40)	$40,240.00
Bid:	$50,000.00
Less 40% Cash Value:	$40,240.00
Total:	$9,760.00
20% Premium ($9,760 x .20):		$1,952.00
Total Payment:		8952

[Ned Carey]

@Russell Brazil thanks for the shout out

@Steph Potter the high bid premium is a difficult concept to explain and understand. 

The bid is the amount you pay, if and only if you foreclose on the property. You pay in the bid to get your tax sale deed when the time comes. 

The high bid premium is basically a penalty you pay the day of the tax sale. You alsways pay the taxes the day of the sale but you also pay the high bid premium the day of the sale also. You DO NOT earn interest on the high bid premium. Any amount you pay the day of the sale is credited towards your bid price when you foreclose and record your deed. 

If the owner redeems the tax lien; you get your lien amouint, interest on your lien amount and the high bid premium back. 

in the example above you would pay $8952 the day of the sale and if you are able to foreclose you would pay $41,058 to get your deed when the time comes. 

However you need to remember if it takes 2 years to foreclose you will have about $3,000 in legal fees and 2 years worth of new taxes and water bills, and potentially fines, that you will have to catch up also.