Bidding on a property up for a property tax lien sale

[GodFearinGunTotin]

A property of a neighbor that has caused me considerable stress the last couple of years is showing up on the notice for properties about to be auctioned off by the county for delinquent taxes. I’d like to buy it, clean it up and keep future troublemakers a few hundred more feet away from me.

I’m reading all I can regarding bidding and then getting a tax deed on this property. I’d like any advice or experiences from INGOers that have done this in the past.

 

[Mij]

Never did it myself, but read about them all the time. The sale like the notice itself is public record. They publish our county in the paper. Small print in public notices. Most (here) are bought by the mortgage holder, they bid the remaining loan amount since they own that much anyway. If you can find that number I would say bid a hundred bucks more. The lender doesn’t want the property or hassle they just want the money they loaned. That’s all I got. Good Luck.

 

[GodFearinGunTotin]

Never did it myself, but read about them all the time. The sale like the notice itself is public record. They publish our county in the paper. Small print in public notices. Most (here) are bought by the mortgage holder, they bid the remaining loan amount since they own that much anyway. If you can find that number I would say bid a hundred bucks more. The lender doesn’t want the property or hassle they just want the money they loaned. That’s all I got. Good Luck.

Thanks for the reply. Not that I was holding back in the OP (I just didn’t want to start off with a wall of text). Let me help out here with what I think I’ve learned so far: Tax lien sales are different than foreclosure auctions. In a tax lien sale you are bidding only on the tax lien. So the minimum bid is the total of the taxes delinquent + the current taxes owed + miscellaneous fees/charges incurred by the county for bringing the case against the person owing the taxes.

I also think the property owner is disqualified from bidding (I assume this is a safety for them bidding the price up). I think if the winning bid is greater than the taxes owed, the owner gets the surplus if they choose not to redeem the property (pay off the judgement + misc fees incurred by the lien bidder).

 

[Born2vette]

Thanks for the reply. Not that I was holding back in the OP (I just didn’t want to start off with a wall of text). Let me help out here with what I think I’ve learned so far: Tax lien sales are different than foreclosure auctions. In a tax lien sale you are bidding only on the tax lien. So the minimum bid is the total of the taxes delinquent + the current taxes owed + miscellaneous fees/charges incurred by the county for bringing the case against the person owing the taxes.

I also think the property owner is disqualified from bidding (I assume this is a safety for them bidding the price up). I think if the winning bid is greater than the taxes owed, the owner gets the surplus if they choose not to redeem the property (pay off the judgement + misc fees incurred by the lien bidder).

I believe in Indiana there is a redemption period after the sale where the owner can pay the winning bid plus fees and retain the property. The winning bidder may not be able to take possession until after the redemption period but these rules may vary by locality. The house next door was sold in a tax auction and I believe the new folks told me they had to wait 120 days after the sale.

 

[GodFearinGunTotin]

I believe in Indiana there is a redemption period after the sale where the owner can pay the winning bid plus fees and retain the property. The winning bidder may not be able to take possession until after the redemption period but these rules may vary by locality. The house next door was sold in a tax auction and I believe the new folks told me they had to wait 120 days after the sale.

Would you happen to know how much over the taxes owed they had to bid to be successful?

 

[Jaybird1980]

I checked into this years ago, so I may remember some wrong.

I think the winning bidder gets a certificate of sale, this is basically a lien on the property for the amount you spent. You do not get a title to the property until after the redemption period is over ( I think it's 1 year), even after the redemption period you have to file for a tax deed in court and that has to be done within a certain period of time.

 

[KellyinAvon]

A property of a neighbor that has caused me considerable stress the last couple of years is showing up on the notice for properties about to be auctioned off by the county for delinquent taxes. I’d like to buy it, clean it up and keep future troublemakers a few hundred more feet away from me.

I’m reading all I can regarding bidding and then getting a tax deed on this property. I’d like any advice or experiences from INGOers that have done this in the past.

(Mr Burns voice) Excellent...

 

[Born2vette]

Would you happen to know how much over the taxes owed they had to bid to be successful?

A LOT! I believe they were bidding against several flippers and the mortgage holder and paid close to $400k for it (value at the time was a little over $500k). A bargain for the house even with the repairs that were needed. Even better, they are great neighbors and have continued to make significant upgrades and improvements.

 

[GodFearinGunTotin]

A LOT! I believe they were bidding against several flippers and the mortgage holder and paid close to $400k for it (value at the time was a little over $500k). A bargain for the house even with the repairs that were needed. Even better, they are great neighbors and have continued to make significant upgrades and improvements.

LOL…good thing for me is this property wouldn’t be worth that unless they found a vein of gold under it. I realize another of neighbor or 2 might want this for their purposes. (it’s land locked with a decent sink hole in the middle of if). And that could drive the price up. I struggle with what it’s worth for setting my max price.

 

[GodFearinGunTotin]

I checked into this years ago, so I may remember some wrong.

I think the winning bidder gets a certificate of sale, this is basically a lien on the property for the amount you spent. You do not get a title to the property until after the redemption period is over ( I think it's 1 year), even after the redemption period you have to file for a tax deed in court and that has to be done within a certain period of time.

That’s the way I’m reading it too.

 

[wcd]

A property of a neighbor that has caused me considerable stress the last couple of years is showing up on the notice for properties about to be auctioned off by the county for delinquent taxes. I’d like to buy it, clean it up and keep future troublemakers a few hundred more feet away from me.

I’m reading all I can regarding bidding and then getting a tax deed on this property. I’d like any advice or experiences from INGOers that have done this in the past.

Has it been confirmed there are no other encumbrances on the property?

 

[CHCRandy]

Man, you really need to know what you are doing to do this. You really should consult with an attorney or someone who does this....I have a guy in Danville who might tell you, he does it all the time. I to think they have 1 year to re-claim the property, by paying you what you paid plus 10%.....and they must also pay you for upkeep and improvements made.

I believe you are buying a lien on the home, but mortgage holder will be first in line, I would think.

It is really something you need to speak with someone who knows and let them educate you......I have never bought a tax lien, but I have worked on homes people purchased tax liens on.

 

[Born2vette]

“In Indiana, real estate may be sold for failure to pay real property taxes. Such a sale can and will remove a valid mortgage lien from the real estate unless the real estate is redeemed.” https://reisenfeldlawfirm.com/mortg...Indiana, real estate may,of the tax sale, I.C.

I spoke with my neighbor and I was mistaken. They actually worked with the mortgage holder who made the winning bid and did the sale to them. The bank was happy to not lose its shirt and made them a really good deal after the flippers dropped out of the auction.

 

[dieselrealtor]

It has been a while since I have done research on this, been to a couple of tax sales but haven't bought anything. Anyone considering this should hire a title company or learn how to do a title search, if memory serves me correctly tax liens & other govt liens survive the sale. There are people that make a living doing this, others that make a few bucks. Buyers definitely need to do their due diligence before proceeding. I know someone who was burned because they didn't do their homework prior to the sale. I will PM you with a contact that may have some information.

 

[Mongo59]

Keep a record of anything you do and receipts for everything you buy.

 

[GodFearinGunTotin]

“In Indiana, real estate may be sold for failure to pay real property taxes. Such a sale can and will remove a valid mortgage lien from the real estate unless the real estate is redeemed.” https://reisenfeldlawfirm.com/mortgage-holder-beware-notice-indiana-tax-sales/#:~:text=In Indiana, real estate may,of the tax sale, I.C.

I spoke with my neighbor and I was mistaken. They actually worked with the mortgage holder who made the winning bid and did the sale to them. The bank was happy to not lose its shirt and made them a really good deal after the flippers dropped out of the auction.

”This case is a lesson to all mortgagees: be aware of the tax status of your loans. “

Not because of this new circumstance but because of this neighbor, I’ve started a habit of perusing the local legal announcements on a daily basis—as a quick check of anything happening that I might not be aware of.

 

[GodFearinGunTotin]

Keep a record of anything you do and receipts for everything you buy.

It has been a while since I have done research on this, been to a couple of tax sales but haven't bought anything. Anyone considering this should hire a title company or learn how to do a title search, if memory serves me correctly tax liens & other govt liens survive the sale. There are people that make a living doing this, others that make a few bucks. Buyers definitely need to do their due diligence before proceeding. I know someone who was burned because they didn't do their homework prior to the sale. I will PM you with a contact that may have some information.

Yes. My reading of things indicates there’s a form 137B process for documenting your expenses. If I decide to go through with this and am successful, I’ll go straight to an attorney to make sure its handled properly.