Tax Sale Tactics
  1. Tax Sale Tactics
    ISBN: 0-9766449-2-4 Price $8.99 +$3 S & H 64 pages Tax Sale Tactics Would you like to start your own real estate empire on a shoestring? Find out the secret of buying property at pennies on the dollar. This book might be the best $8.99 you ever spend. Tax sales are like loaded minefields on a battleground. The goal is worthwhile, acquiring valuable property for pennies on the dollar. For the unwary, the process is loaded with explosives just waiting for the investor to neglect a legal formality or let a deadline slip past. A piece of homesteaded property may be waving a "Danger" flag that the investor ignores at his peril. Failure to know what you are buying and the process can annihilate the investor's dream leaving her with a piece of worthless paper instead of coveted real estate. Getting information from the tax collector's office can result in just instructions on the mechanism of bidding. They proclaim, "We cannot give legal advice." Your local library will direct you to the legal statutes of your state. If these were understandable, we wouldn't have lawyers arguing over each word or phrase of a statute. To make things more complex, laws differ in each state and sometimes from county to county. There are some resources available on the Internet but the prices are exorbitant. Other material is there but difficult to locate. There is a need for information on tax sales in plain terms at a reasonable price. This book will provide all the information you need to get started buying tax certificates and reaping the financial rewards. TABLE OF CONTENTS {TAX SALE TACTICS} {{TRACK 1: What Is A Tax Sale}} Get a basic overview of tax sales. Learn the purpose and functions of property taxes. This track helps set the groundwork for understanding tax sales. Before we delve into the process of the sale itself, It’s important to understand the purpose and structure of property taxes. Taxes are that necessary evil required to maintain the greater good of a community.. Without taxes, there would be no roads, schools, police or fire protection or any of the amenities that make civilization possible. To enable all these institutions, each municipality and county levies taxes on real property. This tract explains how and why they do this. {RELATED MATERIAL} Habersham County Georgia Site http://www.co.habersham.ga.us/html/commissioners/millexplain.html This site gives a good explanation of millage and how a tax base is determined {{TRACK 2: Basic Types}} There are as many types of tax sale as there are states, but for convenience they can be broken down to three main types.. The first type seems simple, the highest bidder buys the title. Of course, there is a lot more to it than that. You may have to register to be a bidder. You certainly must learn the rules in your specific state. One uniform factor in all tax auctions is that the former property owner has the right to redeem the property back. Each state sets different guidelines for the time frame allowed and what you, as the tax certificate purchaser, must do after that time is past. There is more on this, called the Foreclosure of the Right to Redeem, on this page in Track 6 Basic Procedures. {TRACK 3: First Willing Bidder}} Get an overview of how the reverse bidding works. If you are willing to put up the taxes and penalties owed on a property for the lowest interest rate, you win the bid. The lowest rates of interest are pretty high in tax sales. Learn how you can be a winner whether the owner redeems the property or not. Here are the interest rates in some states Arizona - 16% Alabama - 12% Colorado - (9%) above the prime rate. Delaware - 15% Penalty Florida - 18% per annum. Georgia - 20% Penalty Illinois - 18% Penalty per six month period on non farm land and 12% penalty per six month period on farmland. Indiana - 10% penalty if redeemed during first six months - 15% penalty if redeemed during second six months - 25% after one year. Iowa - 2% per month . Mississippi 1-1/2% interest per month Missouri - 10% New Hampshire 18% - New Jersey - 18% . Ohio - 18% (in counties with 200,000 up population) Rhode Island - 10% penalty if redeemed any time during first six months plus 1% for each month thereafter South Carolina sliding scale with 9% highest during last quarter 3% lowest Texas 25% first year 50% second year Vermont - 12% Washington D. C. - 1% per month. Wyoming - 18% {{TRACK 4: Direct Sales }} The direct sale method guarantees you a property. Oregon and Nebraska ate two states that use this method. Many other states use it to dispose of property that has not been successfully bid on in the regular tax sales. Here is an address and the state of Nebraska’s terms for sale of foreclosed property. This is taken directly from their web site and will get you started if you are interested in buying foreclosed property. Nebraska TAX FORECLOSED PROPERTY SALES 1819 Farnam Street, HO8 Omaha, NE 68103-0008 Phone: (402) 444-7913 or (888) 446-6104 FREE • Fax (402) 444-6456 David G. Schreiner - Director William T. Ginsburg - Attorney The Land Reutilization Commission (LRC) was created in 1973 by the Nebraska State Legislature to return tax delinquent real estate to the tax roles. How Do I Use This Information? The following list includes real estate that has been foreclosed due to nonpayment of property taxes. The appraised value is listed for those that have been appraised. If you don't agree with the appraised value, you may have the property reappraised. To do this you will need to submit your reasons for the lower value in writing, along with a nonrefundable reappraisal fee. All monies paid to the LRC must be in the form of a Cashier's check, Money order, or a Certified check. No personal checks or cash please. How Can I Buy This Property? You will need to submit twenty percent (20%) of the appraised value as your down payment by the second (2nd) Friday of the month. A contract is prepared by the LRC staff for the monthly meeting that is held on the third (3rd) Friday of each month. In the case of more than one (1) offer for any property, you will need to attend an auction to bid for the property. All offers received will be reviewed by the LRC Board. If you are an unsuccessful bidder your down payment will be refunded, in about one (1) week. You will be notified in writing of the LRC Board's decision and any refunds will be sent back to those who were not approved. What's The Catch? It Sounds Too Simple! Transfer of title takes approximately sixty (60) days. During that time, the County Attorney notifies the current title and lien holders of the potential sale of the property. The owner of the property must pay all taxes and costs in the foreclosure in order to stop our sale. If the owner does not pay the taxes, the County Sheriff's staff will prepare a Sheriff's Deed for the LRC. When Will I Receive My Deed? As soon as the LRC receives a Sheriff's Deed, you will be notified and given twenty (20) days to make the final payment including closing costs. After your final payment has been made, a Special Warranty Deed will be prepared by the LRC. The County Treasurer cancels unpaid taxes and the property is restored to the tax roles for the new tax year. There may be a large difference between the LRC sale price and the assessed value for real estate taxes. Contact our office for the current value. {{TRACK 5:Basic Terms}} Like any game, you need to know the lingo to appear a knowledgeable competitor. Here are some basic definitions Tax assessor- Person who determines the fair taxable value of a piece of property. Appraiser- Person who determines the price a willing buyer would reasonably be expected to pay for a property on an open market. Title search-A diligent and complete study of all the documents and records related to a piece of property to determine if there are any liens or easements on a piece of property. Easement- The sale of the right to use a portion of a property. This is not the sale of the property itself but just the use of it. The purchaser of an easement for instance might need a roadway to access a landlocked piece of property so he might purchase an easement through his neighbor’s property to cut a road to get to his property. He would not own the property the road is on but he and anyone who later acquires his property has that same right to use the road. Easements must be recorded to be legal. Ad-valorium taxes- Another term meaning real property taxes. The following are two good glossaries defining many real estate terms. {RELATED MATERIAL} Real Estate Glossary http://www.websiteupgrades.com/glossary/free/ A great glossary of real estate terms Realtor.com http://www.realtor.com/glossary/Default.asp?poe=realtor Another great glossary of real estate terms {{TRACK 6: Basic Procedures}} Every state has some different rules. Before you bid in a state, be sure you know that state’s rules. Here are the redemption periods in some states. Arizona – 3 to 5 years redemption periods. Alabama - 3 year redemption period. Colorado -. 3 year redemption period Delaware - One year redemption Florida – 3 year redemption period Georgia - one year redemption Illinois -. 2 year redemption period Iowa - 3 years. redemption period Mississippi. 2 year redemption period. Missouri - 2 Year redemption period. New Hampshire - 2 Years redemption. New Jersey - Two year redemption. Rhode Island - One year redemption period. South Carolina -1year redemption period Texas -2 year redemption period Vermont - 1 year redemption period. Washington D. C. – 5 year redemption period Wyoming - 4 year redemption These are general guidelines. Some exceptions regarding minors and mentally incompetent owners often allow a certain period after the minor reaches adulthood or the mentally incompetent person is declared competent. The Foreclosure of Redemption is a crucial factor. Many states require it be done within a certain time. All states set a minimum time that must elapse before the purchaser of a tax certificate may apply to foreclose the tax payer’s right to redeem. The following is an excerpt from Cobb County Georgia’s tax sale pamphlet Most other states treat foreclosure of Right to Redemption in a similar manner but be sure to check in your state before you bid. " It is your responsibility as a purchaser of a Tax Sale Property to foreclose the right of redemption on that property. Georgia Code Sections 48-4-40 through 48-4-48 provide the complete process. The following is a condensed version of these codes: When real property is sold under a tax execution (sold at tax sale), the original taxpayer or any persons having a right, title, interest in, or lien upon the property may redeem the property at any time within 12 Months from the date of the purchase at tax sale by paying the redemption price. The property may be redeemed at any time during this period until the Tax Sale Purchaser terminates the right to do so by giving proper legal notice. The 12-month limit does not begin to run, however, until the Tax Purchaser pays the amount that he or she bid. (After your purchase get a receipt, signed and dated by the tax commissioner) The Tax Purchaser is not prohibited from consenting to redemption after the statutory period has expired, and as a matter of grace grant such a privilege." {RELATED MATERIAL} Government Tax Sales http://www.gtsweb.com/currentsale.htm Lots of information about Georgia tax sales. Lists lots of tax sales as well as information on procedures {{TRACK 7: Example}} Union County is nestled high in the steepest mountains in Georgia. It is mostly a rural community that almost doubles its population during the fall leaf season. People are moving into the county at an unparalleled rate. The building permit department experienced a 24% increase in new construction. Retirees from Florida and Atlanta are flocking here to escape the heat and traffic. As a result the bidding at a tax sale can be more frantic than in counties with large metropolitan areas. Last years tax sale listed only six properties. Mr. Jackson decided he wanted to move to the mountains when he retired. His strategy was simple. He went to Blairsville, the county seat, and visited the courthouse in early October. He learned that of the six properties offered, four were tracts of land off winding dirt roads on rocky ground. The other two were small plots in the city limits. He knew he wanted a larger piece of land and more privacy. After visiting all of the outlying tracts, He found one that was more easily accessible. It had a small swiftly running creek and was bordered by the Chattahoochee National Forest. Although there was no road cut to the property, it was just several hundred feet from a main forest road. This was well maintained and easily accessible with his jeep Cherokee. Electricity was installed as a small cabin just off the other side of the forest road so he would be able to afford the cost of the three poles needed and the $6 per foot the power company would charge him to lay the lines. He could get water from the creek if he didn’t want the expense of driving a well which he found from the owner of the nearby cabin would be about $2,100 based on a rate of $7 per foot to reach the approximate 300 foot level his "neighbor" told him it would take to reach water. That would be in addition to having submergible pump installed which would run about another $1,300 to $1,400. He also would have to spend about $2,000 for his septic system. There were no zoning restrictions. Although the plot was about ten acres, only two spots were buildable because of the slope, which was steep in some places. On the day of the auction, he went to the courthouse and joined a throng of about forty people all waiting to bid. Union County has no registration. The bidding in Georgia is based on the highest bidder. The bidding went quickly. He had determined he would not pay over $1,700. He had priced similar tracts and found that they would have cost him a minimum of $2,500. The bidding was fast and furious but when he bid $1,500. That ended it. He was the winner. Well satisfied, he went home to Atlanta to await the year period allowed for redemption. If the former owner did not redeem it the land would be his the following October. If the owner did redeem it Mr. Jackson would be repaid his investment plus 20% if it was redeemed in the first year. At the end of the year he would foreclose but if somehow he went even one day over and the former owner did decide to redeem that last day, he would receive a second 20%. (Mr. Jackson is fictitious. The general procedures and types of land are based on property likely to be found in Union County at the tax sale, The date differs each year but is usually in October.) {{TRACK 8: Summary}} The basic rules for a tax sale: know the rules for that state when you bid and learn all you can about the property you wish to bid on. {FAQ} Can anyone bid at a tax sale? Yes, as long as they are of legal age and follow the correct procedure to register. However in most states, state employees and relatives of the delinquent taxpayer are barred. Does it require a lot of money to bid? Absolutely not. Some properties go for under $500. {UPDATES} "There are no updates at this time". {BIBLIOGRAPHY} Illinois State Legislative site http://www.legis.state.il.us/ilcs/ch35/ch35act200articles/ch35act200Sub72.htm The state statutes related to tax sales Miami-Dade County Tax Collector’s site http://www.co.miami-dade.fl.us/taxcollector/property_tax.htm Miami-Dade County tax information The Lexis Legal resource site http://www.michie.com/resources1.html This site has links to several state statutes Louisiana Legislative site http://www.legis.state.la.us/ This site also has links to many other state legislative sites {RELATED MATERIAL} Caddo Parish LouisianaTax Collector’s site http://www.caddosheriff.org/departments/tax.php3 Information about Caddo Parish Louisiana taxes, millage rates, homestead exemptions and general tax sale information in Louisiana Fort Payne Alabama Tax site http://www.fortpayne.com/html/proptax.html Fort Payne Alabama tax information and information about how to record your property in Alabama Rankin county Mississippi Tax site http://www.rankincounty.org/TA/interact.html#Homestead%20What%20IS Information about Mississippi Homestead exemption and tax trolls in Rankin county Find Law http://www.findlaw.com/ A site that offers information on legal matters and help in location a lawyer St. Johns County Florida Tax Collector’s site http://www.co.st-johns.fl.us/Const-Officers/Tax-Collector/INDEX1.HTML This site gives tax information for Florida and St. Johns County including tax rolls Tax Assessor Database http://pubweb.acns.nwu.edu/~cap440/assess.html A database of Tax assessors throughout the U.S. Putnam County Florida Tax Collector’s site http://www.putnam-fl.com/txc/ This site gives tax information for Florida and Putnam County including tax rolls
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