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Counter Offer on Tax Sale Properties (Alabama & elsewhere)
One of my coworkers 96 year old grandfather had her go online and apply for a tax delinquent property in his neighborhood (North Birmingham). It has been empty for years. Story is the owners got old moved in with their kids and their kids had their own home and didn't want to be bothered with the house. It's a very large house too. 4 bedroom, 2 bath, den, just a big house.
Taxes on this home have not been paid since 2007. The quote she received back via email was over $14,000! She printed out the letter and gave it to her grandfather. He submitted a hand written counter offer via postal mail.
They (Shelley Tice) emailed my coworker back.
They accepted his counter offer of.....................$3000!!!! That's less than 22% of the taxes owed!!!! WE BOTH WERE JUST ABSOLUTELY FLOORED!!!!! He bought it! Almost 80% off!!!
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Now y'all know with this information I'm about to step my game up!!! I'm gonna play a small hand and see if I can get a counter offer accepted for the 2 empty lots next to my personal home. The taxes on them have not been paid since 2009. As of today the county estimate for the back taxes is $1166.73 for one & $823.54 for the other. I think $200 & $150 respectively should work. I just submitted my apps today so I'm going to find out soon enough.
>>>>>Questions for my seasoned investors................
Have you ever submitted a counter offer on an over-the-counter tax sale property?
How many years delinquent was it? What was the condition of the property?
Was your offer accepted or rejected?
Did you submit your counter offer via email or postal mail?
And how did you format your letter!?!?!? I want to be as professional & serious as possible, lol!
@Rich Hill, for situations such as your's, I generally offer two years of taxes and no interest on a best price offer.
You can combine multiple properties in one quiet title lawsuit as long as they had the same prior owner.
Thanks for buying the book! My only order in the last several days was in the name of Erin Lucas, and that shipped out yesterday. Was that you? If not, then there was some sort of issue with your order, because it's not showing up on my reports. Please contact me so we can straighten it out.
@Denise Evans, Yes, that is my partner. She is the brains of the operation and working on her MBA. Thank you for your response!
Just wanted to add that your plan sounds great, but the state is not entertaining counter offers at the moment. They have just been inundated with so many requests lately that they are putting counter offer requests on the back burner and will entertain them at another time in the future. No one is really sure when they’ll start entertaining them again. If you really, really want the property, probably best to just buy it now. Make the counter offer, see what they say, but ultimately, if they tell you the same thing they’ve been telling almost everyone else, then my suggestion would be to just buy it. Good luck!
@Ebony King and @Rich Hill, I think they'll be back in business with counteroffers very shortly. They've been really busy with year-end internal stuff that has to be done, on top of all the wholesalers, so some things are just back burnered. Rich, go ahead and make your counter. It's raw land. It's not decreasing in value or deteriorating.
@Denise Evans they are really really slow, they say that it takes them 3-4 months to send a price quote, I have applied for many properties a year ago and haven’t got the quote on yet..
And its not the properties got redeemed or purchased by someone else they are still on their list.
Maybe they give low preference for out of state investors? Lol Idk what am I doing wrong.
@Mario Am, ADOR used to have a price request volume of 1,200 per month. Then the wholesalers started requesting many hundreds of quotes at a time, but rarely buying anything at all. The volume is now averaging 15,000 requests per month, with no additional personnel authorized because all the extra work does not result in increased sales. Everything just takes longer and longer. Plus it means that if you request a quote on something, there might be 40 people in line ahead of you, all wholesalers, none of whom will probably buy the property but each of whom will add an extra 30 days to the wait time until ADOR gets to your request. I am currently working with ADOR and some other parties for a solution to the problem.
@Denise Evans A solution would be highly appreciated! I'm in the same situation with up to 44 applicants ahead. For my past requests the average waiting time is 45 days with 3 days min. and 150 days max. And I was told they don't look at counter offers right now.
I’m working on it. Cannot discuss it yet. Please be patient a little longer, maybe February 2020.
Originally posted by @Denise Evans:
@Mario Am, ADOR used to have a price request volume of 1,200 per month. Then the wholesalers started requesting many hundreds of quotes at a time, but rarely buying anything at all. The volume is now averaging 15,000 requests per month, with no additional personnel authorized because all the extra work does not result in increased sales. Everything just takes longer and longer. Plus it means that if you request a quote on something, there might be 40 people in line ahead of you, all wholesalers, none of whom will probably buy the property but each of whom will add an extra 30 days to the wait time until ADOR gets to your request. I am currently working with ADOR and some other parties for a solution to the problem.
Would it be possible for ADOR to charge a nominal application fee?
@Anastasia Jordan, yes it is possible. "Nominal" is relative. It will probably be in the $50 to $100 range per property.
Originally posted by @Denise Evans:
@Anastasia Jordan, yes it is possible. "Nominal" is relative. It will probably be in the $50 to $100 range per property.
As long as they start the line over that would work! :)
@Anastasia Jordan, they will probably start the line over.
@Denise Evans @Anastasia Jordan I think an application fee would hurt the small investors and limit their possibilities to invest. 7 of my applications are still pending, the fees for those applications can't be used to actually invest. And ADOR would have to refund the fees to applicants, who don't get a certificate (redeemed/sold). That requires more work/resources. A limitation system that actaully works would be a good choice. A well designed software can do the work and accept/decline applications in the first the place. What happend to the rule of 20 active applications per applicant, if they don't buy anything at all?
@Thomas Kramer, @Anastasia Jordan, the problem with a "well designed limitations system" is that people game the system with different company names, partners, strawmen, etc. That is why the old 20-property limitation system failed and was eventually abolished because it was not accomplishing anything. ADOR has computers already that are very capable of keeping track of money and refunding money. That is kind of the business the Alabama Department of Revenue is in.
Originally posted by @Denise Evans:
That is kind of the business the Alabama Department of Revenue is in.
I'm sure it is. :)
A limitation system can use email addresses and there are possibilites to check if applications with different email addresses come from the same computer/device. There could be a limit for each email address used by an applicant (max. 40 active, 20 per month and 5 per day). I carefully decide which properties I'm applying for, I won't apply for more than 20 properties each month. Otherwise, I'd have to use a different email address.
Of course, you can have as many email addresses as you want. But managing/monitoring a lot of them isn't that much fun in the long run. And with a limit of 5 per day, it would take 4 days to reach that limit. That's certainly not a perfect way to prevent abuse, it would just make it harder for those people who want to flood the system.
@Thomas Kramer, I will pass your suggestions along. Thank you for a very thoughtful suggestion.
Got my first response today from the State. Pretty bizarre in that I have submitted about 40 requests in December from counties of Calhoun, Cherokee, and Etowah and the 5 that came back are in no particular order. Only one of the 5 is more than 5 years old so I will submit a counter on that one. I guess the exciting part is that I must have finally identified properties with no one in line ahead of me!
Upon further investigation it seems to me that another one has a quit claim deed from a few years ago that didn't get assessed in the new owner's name. Should I inform someone? The Tax Assessment Report under Grantee has "new owner's name (DEED REF ONLY-BD)". What does "DEED REF ONLY-BD" mean? My guess is Bond for Deed?
@Anastasia Jordan how did the negotiation go? Have you had any success with this method lately? Can I pay you for a copy of your counter letter?
Quote from @Denise Evans:
@Anastasia Jordan, the property must be on the state inventory for at least five years. There is no formula.
@Justice NA, you reply to the email that sent you the price quote.
Quote from @Denise Evans:
@Justice NA, you reply to the email that sent you the price quote.
Thanks for your speedy reply!