OR Offering Tax Deed Properties for Sale Through Realtors®

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OR Offering Tax Deed Properties for Sale Through Realtors®

Don McAlpine
Member since 2023 · 51 posts · 47 votes

With Hennepin vs. Tyler settling what happens to tax deed auction overages, the State of Oregon is changing how some properties are sold to the public.

Previously, all properties went to a tax sale and were sold to the highest bidder.  Now that counties can no longer hold on to the overbid amounts (any amount over the opening auction price), the state is looking to help out those owners whose property was a homestead.  

Homestead properties that are foreclosed on for back due taxes will now be listed with a Realtor® and actively marketed through the Multiple Listing Service. The theory is the selling price in the MLS will be substantially more than the opening bid and opening up the process to the general public will generate more offers and create a greater surplus for the displaced homeowner. If the property fails to sell in 12 months, the property will go to auction at 70% of FMV, and if that fails a bidding process will commence at the minimum bid. Once the property sells the former owner or their heirs can file for the surplus for an indefinite period of time.

Non-homestead properties will continue to be sold to the highest bidder at auction.

I don't invest in OR, but I think the benefit to the investor is the opportunity to walk the property (legally) and be able to make a more informed pricing decision.  If this is successful I would expect more states to follow suit.

This is from an email I received from Linn County, OR: 

"Due to recent changes in Oregon statutes, Linn County is selling a tax-foreclosed property via a real estate agent. Please see the Willamette Valley Multiple Listing Service (WVMLS) for property details and the listing agent's contact information. MLS #844762 Link: WVMLS (https://wvmls.paragonrels.com/paragonls/publink/view.mvc/?GUID=03218e16-ee41-45aa-b6bf-e21d560cf165&Report=Yes) Details on the new parameters for selling tax-foreclosed property via real estate agents can be found on the Linn County Property Management Webpage. (https://www.linncountyor.gov/property/page/real-estate-agentbroker-sales) Properties are sold as is. Linn County does not guarantee title on any of these properties."

The price listed for the opening offer for the property referenced above looks to be well under what it might generate at auction, with a cursory look showing high land value and neighboring properties in the $400s.

Tax deed investors:  Is this a process you could get behind, or do you prefer a classic auction?

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    4w

    I can see the logic in this. However it seems like the municipality would have to take extra legal steps to get possession of the property in order to sell it.

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  • Zuriel Galvez
    Member since 2026 · 31 posts · 9 votes
    3w

    Ned's point is the load-bearing one. Listing on the MLS means the county needs possession, not just title. Oregon gets the county to fee title after the redemption period runs, but title and an empty house are different things, and the distance between them is an ejectment action. Then the county is carrying, insuring and maintaining the property for up to twelve months while a broker works it. That's a real operating burden for a property management department that used to just publish a list and hold a sale.

    On your question, I'd get behind it, but for a different reason than the walkthrough.

    The thing I'd flag for anyone actually investing in Oregon is what this does to the auction pool. Homestead means houses. If houses route to the MLS and only non-homestead goes to auction, the remaining auction inventory gets structurally worse, not just smaller. Land, commercial, odd parcels, the stuff nobody was fighting over anyway. So the process gets better and the pipeline thins at the same time, and those two things land on different people.

    The real opening is the failure path you described. Twelve months on the MLS, then auction at 70% of FMV, then a minimum bid process. A property that sat eleven months with a broker actively marketing it is telling you something specific, and it's a publicly scheduled step-down rather than a surprise. The interesting list isn't the new listings, it's the aging ones.

    The other thing worth noticing is where this inventory now lives. It's in the MLS and on a county property management page. It is not in a tax sale notice anymore. Anyone screening Oregon tax deed sales the usual way simply won't see it, and that blind spot lasts as long as it takes for people to work out that the county pages became the source. Same thing happened when counties started moving auctions onto third-party platforms.

    How are you getting county notices from a state you don't buy in? Being on those lists ahead of the change seems like the actual edge here, and it's a habit worth copying.

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