Overages tax list

[Gena Gonzales]

Does anyone know how to purchase tax overages listing from Alaska? I live in San Francisco.

[David Krulac]

@Gena Gonzales

There will always be people who are owed money from the tax sale that can't be located or are deceased.

However, the number is fewer than you would expect; as a practical matter most properties have debts on them including the back taxes, mortgages, judgments, liens, mechanics liens, Federal tax liens, and municipal liens for water, sewer and trash.

Even at the sales where liens are wiped out, they usually do a title search and give back money to people and entities owed the money.

I'll give you a real example here. I went to a tax sale recently where there were about 2,500 properties on the list. Of these exactly 4 had overages. 3 were estates. The 4th one the overages were paid to creditors and the overage was eaten up. 2 of the estates claimed their money so far and there is one hanging out there that has been resolved yet, but I expect that it will be shortly.

How do I possibly know that, you may ask?

The county does send out letters, after doing a title search, to the former owners and the lien holders. Sometimes the addresses are not current even for the banks. There was one case last year where the lien holder was Chase. Their letter went to the address of a closed branch and was returned to the county, unforwarded, even though Chase had another open branch in the same small town.

Here they county is to make an effort to locate the former owner and the lien holders, but here's what helps them along. In the case of the 3 recent overages and in the case of the Chase overage, the high bidder did research to determine the lien holder or owner, by the title search that they did before the sale and contacted the former owner & lien holder and said,

"There is money that the county is holding for you, here's how to get it and in exchange I want you to sign a Quit Claim Deed to the property for me."

So the high bidder is working in essence for the county to get the money to the former owners & lien holders in exchange for a clear title. And since title companies don't want to issue title insurance on tax sales here, if the high bidder has any chance of flipping the property quickly or even selling it, they need the clear title to proceed.

Therefore in the recent case where there were 2,500 properties on the tax sale list there were only 4 overages and 3 have been liquidated, and the 4th is in process, so there will be no overages left from that recent sale.

That's not to say there are never overages, sometimes people or heirs can't be located. But usually the bidders paying the highest prices at the sale are the more knowledgeable and experienced and know what to do after the sale to clear the title and proceed to re-sale expeditiously. Of the 2 estate properties cited above, deed were recorded in December from the sale and by February (or within 60 days) the high bidders not only rehabbed the properties, marketed the properties on the MLS, but also sold and settled on the properties with new end use buyer. You can't work that efficiently here without clear title. Just the clearing the title filings and answer periods can take 4-6 months, all the time burning your money.

Here's the numbers on the 3 estate properties:

#1 High bid $50,000, overage $33,000, resold after rehab $154,000

#2 High bid $35,000, overage $24,000, title not cleared yet

#3 High bid $59,000, overage $46,000, resold after rehab $140,000 FHA, 2 DOM