Specific Tax Deed Questions for GA Investor

Tax Liens & Mortgage Notes
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Specific Tax Deed Questions for GA Investor

Roberto Verdaguer
Real Estate Investor · Acworth, GA · Member since 2016 · 4 posts · 1 vote

Hello there, 

My name is Rob and I am new to BP.  I joined because I have been lurking on here for a bit and learning as much as I possibly can about Tax Lien and Tax Deed investing. I am most likely going to pull the trigger this upcoming month at the next Tax Deed Auction but I am trying to find the answers to these particular questions before doing so. A few of the questions I have are answered generally (with other states) in these forums but if anyone who is knowledgable about how Tax Deeds work in Georgia specifically could answer some of these, I would be extremely grateful.

These are the things I would like to know before I start investing...

1) Is the entire amount bid (winning bid amount) subject to the 20% penalty (amount applied in Georgia for the first 12 months) or just the initial taxes owed? (Just to confirm that what I have read is 100% correct.)

2) Who receives the premium which is bid above the tax debt? If the tax deed is redeemed and the property owner pays the full amount owed plus the 20%, who receives the funds above the premium that were payed at auction? Does the property owner get reimbursed this part of the debt once his obligations are met or does the county stay with the funds? 

For example.... 

Taxes owed $3,0000

Winning Bid $10,000

Total price to redeem (assuming the 20% penalty applies to total) $12,000

Who receives the $7k difference between the $3k that were owed and the $10k that were paid? I am correct in assuming that the person redeeming will be paying $12k or are they just paying the $3k they owed plus the $2k in penalties and the county is returning my $7k premium that I bid over the amount owed? (Sorry ahead of time... I know it's a hell of a long and ridiculously complicated question but I need to know how this all works if I plan on investing.)

3) Can you legally contact the owner of the property to collect the money owed and agree on a lower price than the 20% in hopes to redeem the tax deed sooner?

4) Can you legally contact the owner of the property before purchase in order to determine if they are even interested in redeeming the taxes or if they are more likely to let the lien take the property into foreclosure?

5) Where can I search the title of the property along with any penalties or fines associated with acquiring the property after a foreclosure has taken place?

6) How much is owed above the winning bid once a tax deed is purchased (recording fees and such)?

7) In the case of having to foreclose after the 1 year redemption period has expired, would the owner of the property be responsible for foreclosure fees and sheriff fees (eviction) in the case he decides to redeem the property right before the foreclosure is finalized? Are the fees associated with foreclosure proceedings also subject to the 10% + 20% penalty which is applied after the first year? Are the subsequent year's taxes payed during the year waiting for redemption also subject to the 20% penalty and the 10% after the first year?

8) Where do I find information pertaining to the owner of the property filing for bankruptcy (which would nullify the sale)before the auction and after he was notified of the tax lien?

9) How do I verify that all associated parties were correctly contacted by the county and that the tax deed auction on a particular property will likely not be voided?

10) How can I verify the auction listing to make sure the sale does not contain any errors which may be disputed in court?

11) How can I find out if there is a mortgage on said property and how much is still owed to the lender?

12) What liens or penalties on the property are not erased after foreclosure through a tax deed and where can I find information on any of these type of (hoa, irs, ect.)liens, penalties or fines on a property?

Thank you for reading this even if you don't have any of the above answers I hope this thread could help clarify the more specific questions that other investors in my same position are in. I am sure that there are other lurkers out there that haven't joined the forum yet and I hope this helps out everyone that might share some of the same questions I have. 

Rob

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Joe Mclain
Consultant · Ball Ground, GA · Member since 2015 · 228 posts · 100 votes
10y

I hope others can answer your additional questions but my answers to some of them are below.

2) The county collects the overage collected at the tax sale.  That money stays with the county and is another that some "experts" claim you can make money from tax sales.  One strategy is to contact the home owner prior to the sale, offer them some money for signing the property over to you, register your deed with the county, let the county bring that to tax sale then collect the overage from the sale.   Does that make sense?

3) If you go this route then the tax sale won't wipe out the mortgages or other debts.  You can do this but its a little dangerous if you ask me.  Do your due diligence.

4) If you can find them.  Remember they may not be there any more.  

5) http://search.gsccca.org/RealEstate/

Hope this helps

Joe

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  • Joe Mclain
    Consultant · Ball Ground, GA · Member since 2015 · 228 posts · 100 votes
    10y

    I hope others can answer your additional questions but my answers to some of them are below.

    2) The county collects the overage collected at the tax sale.  That money stays with the county and is another that some "experts" claim you can make money from tax sales.  One strategy is to contact the home owner prior to the sale, offer them some money for signing the property over to you, register your deed with the county, let the county bring that to tax sale then collect the overage from the sale.   Does that make sense?

    3) If you go this route then the tax sale won't wipe out the mortgages or other debts.  You can do this but its a little dangerous if you ask me.  Do your due diligence.

    4) If you can find them.  Remember they may not be there any more.  

    5) http://search.gsccca.org/RealEstate/

    Hope this helps

    Joe

    1Reply
  • Roberto Verdaguer
    OP
    Real Estate Investor · Acworth, GA · Member since 2016 · 4 posts · 1 vote
    10y

    Thanks for your input Joe Mclain. I am wondering a little about the answer for 3.... If I contact the homeowner and he pays back the debt, why would I be concerned about wiping any existing mortgage or other debts? I would have acquired the funds that I put on the auction price and the 20% penalty which would leave me out of the property completely.

    0Reply
  • Joe Mclain
    Consultant · Ball Ground, GA · Member since 2015 · 228 posts · 100 votes
    10y

    @Roberto Verdaguer For #3 I was thinking that you were contacting the owner prior to the tax sale.  Yes you can contact the owner if you can find him.   You are trying to get the deed to property before the 1 year right of redemption has expired.   Some people have been successful throwing some money in exchange for the signing over of the title of the property to you. 

    your question was worded kind of strange.   The 20% only applies if the owner wants to redeem the property.   That is what is owed to you for your investment in the tax deed.  At redemption, the owner would pay the taxes, county fees, and 20% to you.

    Joe

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  • Roberto Verdaguer
    OP
    Real Estate Investor · Acworth, GA · Member since 2016 · 4 posts · 1 vote
    10y

    @Joe Mclain I would consider that if it wasn't for the fact that if there is an outstanding mortgage on the property, I would be inheriting that mortgage from the previous owner. In the case that I purchase the tax deed at auction and there is a mortgage, chances are that the bank will pay the debt and my 20%. The tax deed route seems like a better investment to me. If the person does not have any mortgage, I'm pretty sure it would be rare for him to sign over the title of the property to me just for paying the taxes owed and the 8-10k I would be willing to invest in the property.

    What I was asking with my third question was ... After purchasing the tax deed at auction, if I would be able to contact the person who owes the debt and offer him a lower rate, maybe 15-16%, to redeem if he does so by a given date (let's say... within a month.)

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  • Joe Mclain
    Consultant · Ball Ground, GA · Member since 2015 · 228 posts · 100 votes
    10y

    @Roberto Verdaguer So you have a property.  The owner of the property didn't pay the taxes on that property for some reason.  Perhaps he is divorced and walked away, sick in the hospital, dead, etc. You get the picture, some problem has resulted in him not paying those taxes.   Now Roberto has the tax deed.   Roberto manages to track down this sick, divorced, dead person and tell him that if you sign this document, you will save 4-5%.   Wooooo good luck with this plan.  

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  • Roberto Verdaguer
    OP
    Real Estate Investor · Acworth, GA · Member since 2016 · 4 posts · 1 vote
    10y

    @Joe Mclain, it's a win-win.. That means that it would most likely not redeem then and I will get to foreclose on the property. Not sure where the pitfall is on that. Just wondering if it's legal.

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  • Sam Bagwell
    Attorney · Gainesville, GA · Member since 2015 · 106 posts · 87 votes
    10y

    1.  The entire winning bid amount .

    2.  The county holds the excess funds, but they can be released to prior owners or lienholders under certain circumstances.

    3.  Why would you do that?  On one of my tax sale purchased, I was contacted by the primary mortgage holder a week after the sale, and they were looking for a discount on the redemption.  i said no, because the redemption during the first year or any portion thereof is the full 20%.

    4.  of course.  you can contact whoever you want, including any other interested parties or lienholders.

    5.  title searches are done in the deed records of the county where the property is located, or online through the Georgia Superior Court Clerk's Cooperative Authority.  Some counties have their own online portal, but not all.

    6.  well, that depends.  A deed is typically $10 for the first page and $2 for each additional page, but you will have far more expense than that.  In doing the foreclosure of right to redeem, you'll wind up paying title search fees, service of process fees, certified mail, etc..  Once that's done, and you want to do the quiet title, assuming you need to hire an attorney to take care of that, you'll be looking at a couple thousand dollars, plus court costs of several hundred.  So, a broad "how much is owed" is really tough to answer.

    7.  you aren't foreclosing on the property.  You are foreclosing the right of the owner (and other interested parties) to redeem the property.  The short answer is if the prior owner then redeems, you can have them pay those costs.  If they do not redeem, then they do not pay those costs.

    8.  you would have to search the owner's name through the bankruptcy court clerk on line, but even then, they may have filed in a district that you didn't search.  Bankruptcy can complicate things, but in the end, you would most likely be entitled to the return of your initial investment (though you may have to pay some bankruptcy attorney fees for help in pursuing that in the bankruptcy case itself).

    9.  you don't, and can't, but you are entitled, under the tax sales statutes, to rely on their deed as though they have.  Further, the burden then shifts to you, as part of the foreclosure of the right to redeem, to notify all interested parties correctly.

    10.  you can't.  everything can be disputed in court.  I could sue you right now for property damage because you crashed into my car.  I wouldn't win; we've never met, you didn't kit my car, but I could absolutely file the suit and have that dispute.

    11.  do a title search, call the lender if there is one.  They may not tell you the payoff amount, though.  you don't need that information anyway, though.

    12.  do a title search, do a probate search on all interested parties, watch out for federal tax liens and bankruptcies.

    1Reply
  • Ed Tamayo
    Investor · Sugar Hill, GA · Member since 2014 · 168 posts · 97 votes
    10y
    "Originally posted by @Sam Bagwell:

    7.  you aren't foreclosing on the property.  You are foreclosing the right of the owner (and other interested parties) to redeem the property.  The short answer is if the prior owner then redeems, you can have them pay those costs.  If they do not redeem, then they do not pay those costs."

    I would like to know if in Georgia one needs to file an Action with the courts as part of the Foreclose of the right to redeem.  For example, in Arizona one would file an Action and then  obtain a Judgment. Is that the case in Georgia?  Thanks much for any light on this subject. 

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