Tax Sale Notice, Can Someone Interpret This??? (Bid-up?)
Hello All,
I am registered to bid at an upcoming tax lien sale, I have the general idea, but this notice is a little confusing to me...
Can we make this plain language? (I added the paragraph numbers for ease of discussion).
1) The tax sale is open to the public. Prospective bidders should investigate the properties. There is no warranty, expressed or implied, that a property has a marketable title, that it contains the area of land described herein, that the property does not contain faults that would be fatal to tax sale foreclosure, or that the true market value of the property bears any relationship to the assessment stated herein. The purchaser agrees to assume all risks in regard to these matters. Purchasers will be entitled to a certificate of sale as required by law.
2) In the event a tax sale is subsequently invalidated, the Tax Sale Purchaser will receive a refund of the amount paid at Tax Sale, but will receive NO redemption interest, or reimbursement of attorney fees, title search or other cost. Events that may invalidate a Tax Sale include, but are not limited to, bankruptcy filings prior to Tax Sale and transfer errors on the Assessor’s record that cause a failure of notice to the true property owner.
3) The list of delinquent taxpayers shown may include taxpayers who paid their taxes since the list was submitted to the newspaper for publication, and does not necessarily mean that their taxes are still delinquent.
4) The Sealed Bid Process will be utilized for this year’s tax sale and no property will be sold for less than the advertised price. No later than the day following the tax sale, the bidder/purchaser is required to pay the full amount advertised plus any high-bid premium.
5) At the time the advertisement is prepared, all delinquent tax accounts from the various election districts will be divided into property groups consisting of approximately the same number of properties. (The number of properties in each group can be expected to decline as payments are received, as described below). The property groups will be numbered for identification.
6) During the advertising period, April 17th through May 8th, properties will be removed from groups predicated on payments received from taxpayers. Therefore, the final newspaper advertisement on May 8th will list groups with fewer properties than were originally advertised.
7) Bidders can bid on one property group, multiple property groups or on any number of individual properties from different groups. Bidders bidding on full groups will be given priority over bidders seeking to purchase individual properties.
Any property that is being advertised and sold individually, by Sealed Bid Process, has been removed from a group at the request of the property owner(s) or other interested party. Reasons proffered to the County for removal of an individual property from a group range from the need to cure a title defect to a disparity between the actual value and the assessed value. The County cannot restrict bidding on these individual properties but notes that the property owner(s) or interested party have requested that bidders refrain from bidding on these properties.
9) Pursuant to1999 tax sale legislation, the County must establish a high-bid premium for all properties sold in-groups and/or by a sealed bid process. This high-bid premium is 20% of the amount by which the highest bid exceeds 40% of the property’s assessed full cash value. The high-bid premium is payable at the same time the successful bidder pays the tax sale amount.
10) The County will refund the high-bid premium, without interest, to the holder of the tax sale certificate upon redemption of the property or to the plaintiff in an action to foreclose the right of redemption upon delivery of a tax sale deed for the property for which the high-bid premium was paid. The high bid premium is not refundable after the time required (under Section 14-833 of the Tax-Property Article) for the filing of action to foreclose the right of redemption, if there has been no redemption and if an action to foreclosure the right to redemption has not been filed within that time. In addition the High Bid Premium will not be refunded in the event a tax sale foreclosure suit is dismissed and there has been no redemption.
12) ...For example, a multiple bid factor of .43 would indicate that the bidder is bidding .43 times the assessed value on all properties in the group. The multiple bid factor can be different for different groups if a bidder is bidding on more than one group. The bid may not, however, be different for individual properties within the group. If a bidder is bidding on multiple individual properties, the bid factor can be different for the individual properties.
Thanks!
Here's an example tey provide for "sealed bids". Is this all?
Tax Sale Calculation for Sealed Bids:
Examples (using different bid factors):
Assessed Full $118,000 Assessed Full $100,000
Cash Value Cash Value
Bid Factor x 0.46 Bid Factor x 0.50
Bid = 54,280 Bid = 50,000
40% of Full Cash – 47,200 40% of Full Cash – 40,000
Premium = 7,080 Premium = 10,000
20% of Premium x .20 20% of Premium x .20
Premium Payment = 1,416 Premium Payment = 2,000
Therefore: Therefore:
Taxes $ 1,299 Taxes $ 2,000
Premium + 1,416 Premium + 2,000
Total Due = $ 2,715 Total Due = $ 4,000
I'm not going to anwer all of your questions -- but I'll give you my interpretation of parts of #1.
Note - I am not a lawyer and this is only my thoughts/conjecture.
The tax sale is open to the public.
(anyone can bid)
Prospective bidders should investigate the properties. There is no warranty, expressed or implied, that a property has a marketable title, that it contains the area of land described herein, that the property does not contain faults that would be fatal to tax sale foreclosure, or that the true market value of the property bears any relationship to the assessment stated herein.
(the bidder assumes all responsibilites for determining the true value of the property -- including any EPA potential problems)
The purchaser agrees to assume all risks in regard to these matters. Purchasers will be entitled to a certificate of sale as required by law.
(Buyer beware, but in return for your funds ($) you get a legal certificate of sale of the property -- if you follow the legal process required -- you can take possession of the property once all of the legal requirements are satisfied).
Quote:The purchaser agrees to assume all risks in regard to these matters. Purchasers will be entitled to a certificate of sale as required by law.
(Buyer beware, but in return for your funds ($) you get a legal certificate of sale of the property -- if you follow the legal process required -- you can take possession of the property once all of the legal requirements are satisfied).
I am now trying to figure out "the process" for foreclosing for this county and the one next to it-which has their sale about 4 weeks later...
Thanks for the translation.
Anyone else?
Cliffrock--(MD)---------------
I suggest you get into a law library and study the "anotated" statutes related to collecting delinquent property taxes in MD. And copy the pertinet statutes so you have them at home for reference.
Good Investing*******Ron Starr***********
Look for (or ask about), in particular, the details of the redemption period. The longer it is the longer you'll tie up your money, anxiously waiting to get in there and get to work. The upfront cash could be tough to arrange too, and not the best place to employ a hard money lender. Some counties will finance tax sale purchases; maybe yours actually would? Doesn't hurt to ask.
Inspection of the property should go without saying, although I wouldn't put too much time in until just before the sale; hopefully you can call and get updates about what's still available and what's been redeemed. Ask, too, about repeat properties that weren't bought last year. They may be offered at lower prices this year, but not necessarily. Do what you need to, based on your own risk/reward profile to assure that it is as it is presented. Most times it probably is. Still, there is a reason the owner let this property go.
Any info you can find about the property or its owner (web searches, courthouse searches) may help; e.g., a court records check could show s/he's in prison, or a repeat offender who's not too responsible. Maybe there's a mechanic's lien suggesting problems that may not have been resolved.
On the other hand, these apparently draconian rules could discourage other investors to the point where there could be some good deals. In your shoes, I'd talk to the officials, get them on your side with "I'm new just getting my bearings" questions about how many calls and bids they typically get, how much properties usually get bid up, what percentage go unsold, etc.
One way of avoiding all of this is to find properties BEFORE they go to the tax sale (taxsales.com has some info about this; read between the lines of their sales pitch; sadly, their forum appears gone now), and write to or track down the owner to talk turkey. Then you have the possible benefit of getting to inspect the property closely, and working a deal that involves a possibly motivated seller and NO redemption period. Just a few ideas.
I swear, one thing I love about this forum is that I get sooo fired up that I have to leave the keyboard and take action!
I am following the first rule of investing:
KNOW THE RULES!
Thanks all. I'll update when the time is nearer!