quick question about tax deed sales - not sure what these numbers mean?

Question

I am looking at some listings for tax deed sales. here is what i see in one of them:

"
Judgement Date
09/17/2009
	
Order Issue Date
10/29/2009
 
Case Style
COUNTY, ET AL VS NAME, ET AL

Legal Desc.
LT 7 BLK 3 LIBERTY ROAD MANOR SEC 20 U/R

Physical Address
ADDRESS

Adjudged Value
$6,936

Estimated Minimum Bid
$6,936.00
"

What does the adjudged value mean? Why is it the same as the minimum bid? Some other listings have a minimum bid significantly below the adjudged value. What do these two numbers really mean? I saw one that had an adjudged value of 60k, with a minimum opening bid of only 1300!

Thanks for any advice.

Marc Faulkner · Answer

Corey,
     If you are looking for cash flow as you mention in the last post then you need to look into buying performing notes vs. tax deeds.  With tax deeds you can make money 2. ways in that you buy the deed and own the right to the property unless the person that owed the taxes redeems the property by paying the backtaxes and interest due to you.  The rate you are able to charge varies by state.  Should the property owner not redeem in the time period allowed (again varies by state) then you now own the property and you can now rent, sell or otherwise do as you see fit.
If you are just looking to sit back and collect interest payments without the headachs of owning property then, you want to buy first position notes secured by contracts that have good pay histories, equity and credit worthy payers.  You in essense buy into the position of the bankwith the rith to collect future payments.  We typically run these through a third party servicer that does the collections and year end reporting.  Unless you have a solid plan on what to do with tax liens and properties that you might end up owning as a result of buying one, I don't think these are what you are looking for based n your last post.

Jim Wineinger · Answer

This is incorrect information, as far as "all states". There are several states that conduct a sale each month. Several others that are only once per year and still others that are bi-yearly.

There is still too much in question about which sale is being spoken of. There is a tax certificate sale, a tax lien sale, a tax deed sale, all of these sales can be redemption sales or non redemption sales. Then you can also have surplus lands sale which have already passed through a tax sale at which there were no bidders for that property which was oficially purchased by the county/state which purchased them by no bidder outbidding their "starting bid". These can often be purchased by a sealed bid accepted by the "delinquent tax board" which will authorize the sale for a lower amount than the "starting bid" after it has been advertised that a bid has been recieved for XXX number of days in the legal section of the local paper. If no other bids are recieved in that period then the property is yours immediately.

I put out this information to show that you must first know what kind of tax sale you are dealing with, before you can apply the state/county laws to the tax sale.

Lynn Devoll · Answer

Hey Corey. The law has changed now, at least here in Oklahoma. They now have only 1 sale per year, in June. Now the sale minimum bid is the amount of back taxes. There use to be 2 sales per year, 1 in Oct which was to catch up the taxes and then the property owner could catch up, plus interest. I think the law was changed in all states for the sale to be in June. The sale in June, if you get the winning bid, the property is yours regaurdless if the property is occupied or not, by renters or owners. Also, if there is a lien on the property from a financial organization, you may have to deal with them, but ultimatly, they will have to go to the borrower and they can not hold you responsible for the note. If the property is occupied by the owner, they must sign a rental agreement with you in order to stay, or they must leave within an agreed on amount of time with you.

Hope this helps.

Richard Castillo · Answer

Here you go corey.

https://texas.public.law/statutes/tex._tax_code_section_33.50

Section 33.50

Adjudged   Value

(a) In a suit for foreclosure of a   tax lien on property, the court shall determine the market value of the   property on the date of trial. The appraised value of the property according   to the most recent appraisal roll approved by the appraisal review board is   presumed to be its market value on the date of trial, and the person being   sued has the burden of establishing that the market value of the property   differs from that appraised value. The court shall incorporate a finding of   the market value of the property on the date of trial in the judgment.

(b) If the judgment in a suit to   collect a delinquent tax is for the foreclosure of a tax lien on property,   the order of sale shall specify that the property may be sold to a taxing   unit that is a party to the suit or to any other person, other than a person   owning an interest in the property or any party to the suit that is not a   taxing unit, for the market value of the property stated in the judgment or   the aggregate amount of the judgments against the property, whichever is   less.

1. that   person is the highest bidder at the tax sale; and

2. the   amount bid by that person is equal to or greater than the aggregate amount of   the judgments against the property, including all costs of suit and sale.Acts   1979, 66th Leg., p. 2296, ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts   1997, 75th Leg., ch. 914, Sec. 5, eff. Sept. 1, 1997; Acts 1999, 76th Leg.,   ch. 1481, Sec. 21, eff. Sept. 1, 1999.

Jim Wineinger · Answer

Cory, I am not sure what is meant by these terms. But usually the homeowner is sued by the county. This would be the judgement date. Then the lien on the property is sold at an auction shortly thereafter. I would suspect this to be your order issue date. 
That would lead me into believing that someone is trying to sell you the right they have to the lien on the property.

Before you go any further make sure this sale is conducted by the county itself or you may be buying something from someone which is worthless.

quick question about tax deed sales - not sure what these numbers mean?

Most Popular Reply