Tax deed sales in Florida

[James Canavan]

Does homestead exemptions affect a tax deed sale in regards to an investor  purchasing at an auction?  

[Wayne Brooks]

no, only the opening bid is higher, taxes due plus half of assessed value.

[John Thedford]

@James Canavan Taxes are a superior lien. Homestead cannot protect an owner from not paying taxes or a mortgage. Homeowner has until the time funds are tendered to pay. If you are the high bidder and the homeowner beats you to the clerks office, they can redeem. You beat them and they are out of luck. Once a buyer tenders funds, they can extinguish all mortgage liens. All government liens for taxes, assessments, or fines stay with the property. I don't know if code enforcement fines get wiped out but suspect not. All past due taxes are paid with proceeds of the sale. Assessments usually transfer with title to the new owner.

[Account Closed]

Can anyone explain to me how these tax sales work and where I can find an inventory of tax defaulted property? Thanks in advance for the feedback.

[Christine T.]

@Jonathan Chames properties are sold to the highest bidder.  Most auctions in Florida are online.  Properties coming up for auction can be found on each County's website.

[Wayne Brooks]

Clerk of corrupt site, same auction site as Foreclosures.

[Account Closed]

@Christine T.What exactly are you bidding on?

[Christine T.]

@Jonathan Chames property that will have a good ROI. Is there a title issue? Pass. Is it in a war zone? Pass. Does the owner live out of country? Pass. Would the repairs and other associated costs make profits slim or non-existent? Pass.

[Christine T.]

And can someone explain to me why when I use the @ with someone's name that it doesn't turn blue?

[Daria B.]

@Christine T.

seems to work now....it might have been messed up when you typed the "at" and "question mark". that happens to me sometimes. with this new redesigned site, i'm having problems now getting the names to show up whether in the post or the person being my colleague. it's hit or miss.

[James Mikel]

Tax Deeds and Homestead Exemption:

When a property owner has homestead exemption in the year in which taxes were unpaid, the tax lien investor is unaffected.  If that lien is unredeemed the resulting tax deed sale will include a 50% of assessed value markup.  This markup is made at the point of sale and will be added to the advertised opening bid posted.  This is a Florida statutory requirement so it is the same in all counties.  In these scenarios the opening bid will reflect the markup and the actual amount owed to the lien investor "tax certificate holder". 

The oddity occurs when the property receives no bid or the lien investor fails to render payment to transfer the tax deed to himself or the tax lien was held by the county.  The property tax deed will then reside on the List of Lands.  During that time, even when homestead exemption is dropped by the property owner, the 50% still resides.  I have found otherwise good and valuable properties on the list that were previously homesteaded.  Some were demolished homes, some were properties bulldozed after a catastrophic event and others where a mobile home was removed.    These properties are ripe for purchase as the actual taxes and accrued interest were in the few hundred dollar range and the properties had utility improvements .  But, the dreaded  50% kills the ability for profit.  Most recently someone called me in regards to a property he found on the LOL, great lot with septic tank and well on property, nice driveway and electric already there.  Problem was the dreaded 50%, while the lot was worth $20,000 with the improvements, the required amount to obtain the tax deed was $45,000.  A relatively new mobile home had been pulled from the property.   My advice was to wait the three years until the property escheated to the county then contact the Board of County Commissioners to locate the division which handles surplus county owned property. 

[Anthony Yannucci]

Has anyone tried and been successful with negotiating with the county with the properties on the the LOL?  If some have been on the LOL for years, I would think the county might want to negotiate the price.

[James Mikel]

There is no negotiation, I have tried in multiple counties, more than once.  Once the opening bid for the tax deed is set in stone, it will remain at that price for three years while on the LOL.  The structure surrounding the derived opening bid is set by statute.  The county really can't change that as it would not be in compliance with FL law.  But, once the property escheated to the county the issue is no longer under the thumb of statute and the county will do with it what they will. 

Many times if you are seeing property in the LOL that has been listed there over three years, it is out of convenience of the county not by requirement of statute.  If you find something interesting there that is over the 3yrs call the Tax Deeds or Clerk of Circuit Courts and inquire.  These properties will be negotiable but will take a while to convey as: (1) the escheatment will have to be approved by the County division handling it; and, (2) the BOCC will need to approve the sale to you; and, (3) the property is then offered to municipalities within the county; and, (4) a county deed will be drafted by the County attorney. 

The Clerk's of Tax Deed's office, after inquiry, will send you a format or processed form to fill out that will include your offer amount for the property.  They will submit it to the proper division.  The actual deed has to be drafted prior to BOCC approval.  Basically they vote on it if they accept the deed gets signed. 

I have bought properties by BOCC approval after escheatment and tax deeds from the LOL but not once have I been able to get the county to reduce the amount owed while the property was on the LOL list.   

[Christine T.]

Thanks James!  As always, great information.

[David Williams]

I'm new to investing and also new to BP. It is in regards to the 50% assessed value on the tax deed sale that was mentioned. You can't be referring to total property value are you? Let me explain my question by giving a "rough" example. Say a $100k property goes to the tax deed auction. It typically will show $2k in back tax and about $10k in fees, ( certificate holder interest and late fees I'm assuming) which brings the total to about $12k as an opening bid. Where does the 50% ( $50k in this example) come in? I'm clearly missing something.

[Christine T.]

Originally posted by @David Williams:

I'm new to investing and also new to BP. It is in regards to the 50% assessed value on the tax deed sale that was mentioned. You can't be referring to total property value are you? Let me explain my question by giving a "rough" example. Say a $100k property goes to the tax deed auction. It typically will show $2k in back tax and about $10k in fees, ( certificate holder interest and late fees I'm assuming) which brings the total to about $12k as an opening bid. Where does the 50% ( $50k in this example) come in? I'm clearly missing something.

If the property is homesteaded, yes, 50% of the assessed value will be added to the 12k so in your example, opening bid would be 62k.

[David Williams]

Thank you for the clarification. I had never noticed that before because as I would go through the list I would ignore the homestead ones because the potential profit spread wasn't large enough to justify the hassle of a clear title and I never bothered to see why until your reply. Thank you 

[Account Closed]

Is there an advantage of bidding on a Tax Deed as opposed to a Tax Certificate? Granted I understand that with the deed you get the property and the certificate your really just buying a note. But it seems that with the 50% assessed rule, you are risking a huge amount bec you ultimately don't really know what your going to be in for. Sorry im new to this so if its a dumb question I apologize.  

[Josh Carr]

The list of lands available are properties that have already gone up for sale at the tax deed auction and did not get purchased.  You can purchase a property providing that it is prior to the 3 years escheat date, which is the date that it goes away- at that point the county will do with it whatever they want.  If you are willing to pay what the back taxes are on all years plus interest that has accrued over time with fees, then you will be able to purchase the property outright.  It is a great way to get properties for the back taxes plus fees where you can get a good deal without any competition.  It is important to research and know what you are getting. Most counties in Florida will allow you to view the title search on these properties. There are some with homestead exemptions, however, the additional 50% of the assessed value plus the back taxes will be included in the price on the list that you are looking at.  

[Wayne Brooks]

@Account Closed There's no reason to avoid looking at the homestead properties going to tax deed auction.  If you look at current and past results, you'll see that you'd very rarely buy something at auction for less than than the taxes plus half the assessed value anyway.  If you're looking for properties for less than half of assessed value, you'll likely never buy one at the auction, unless it's actually a tear down.

[Roman M.]

It depends on what you are looking for in an investment.  People that buy tax lien certificates mostly are not interested in getting title to the property.  For them it's investing for higher return.  If you want to get the property then you bid at tax deed auction. This is when you get the property with all the municipal violations that come with the property (so do your lien search before bidding). Only homestead property has 50% rule. If you buy non homestead you usually get it for about 10% of the assessed value unless the property is in huge demand and other sharks jump in and then bid it up to whatever they are willing to pay. 

Realistically if the property is of value then you might get it at 20% off. However if there are code and building violations that you might get it real cheap as not everyone wants to deal with those.  This is where real money is if you can mitigate those violations and get a discounted payoff.  I have seen a $1mln city of Miami violation for not having a number on the house and a $250,000 violation for not having grass cut.  Oh and don't forget about cross liens those can be a "Pandora box".

You got to do a lot of homework or you can get burned bad. 

[Rashida Kharkhariwala]

hello
What is LOL ? Is it life of Loan? Where to get this list from?
I have a question about the HOA's - in IL the new buyer is only responsible for last 6 months of unpaid HOA's, is it the same in the State of FL?


Originally posted by @James Mikel:

There is no negotiation, I have tried in multiple counties, more than once.  Once the opening bid for the tax deed is set in stone, it will remain at that price for three years while on the LOL.  The structure surrounding the derived opening bid is set by statute.  The county really can't change that as it would not be in compliance with FL law.  But, once the property escheated to the county the issue is no longer under the thumb of statute and the county will do with it what they will. 

Many times if you are seeing property in the LOL that has been listed there over three years, it is out of convenience of the county not by requirement of statute.  If you find something interesting there that is over the 3yrs call the Tax Deeds or Clerk of Circuit Courts and inquire.  These properties will be negotiable but will take a while to convey as: (1) the escheatment will have to be approved by the County division handling it; and, (2) the BOCC will need to approve the sale to you; and, (3) the property is then offered to municipalities within the county; and, (4) a county deed will be drafted by the County attorney. 

The Clerk's of Tax Deed's office, after inquiry, will send you a format or processed form to fill out that will include your offer amount for the property.  They will submit it to the proper division.  The actual deed has to be drafted prior to BOCC approval.  Basically they vote on it if they accept the deed gets signed. 

I have bought properties by BOCC approval after escheatment and tax deeds from the LOL but not once have I been able to get the county to reduce the amount owed while the property was on the LOL list.   

[Anthony D.]

This is a really great thread on Tax Deed Sales, very informative....Thanks Guys!!