2016 Coconino County Arizona Tax Lien Auction Results

[Jerry K.]

The 2016 online tax lien auction for Coconino county in northern AZ ended last week and here are some unofficial results. Results can change if investors do not make their final payments for their lien purchases.

Dollar amount and number of liens sold was flat this year for Coconino compared to 2015.

I eliminated the "Struck to County" liens which are the liens nobody bid on and are now held by the county. There were 1,227 liens that were struck to the county. A total of $1,303,047.86 in liens not sold.

Number of liens sold to investors:

2016 - 766

2015 - 767
2014 - 1,062
2013 - 1,220

Total dollar of liens sold:

2016 - $789,139.40
2015 - $752,379.78
2014 - $1,359,566.57
2013 - $1,868,433.33

Average rate of return overall:

2016 - 4.71% (11.74% if you include the Struck to County which all get 16%)

2015 - 6.52% (12.58% if you include the Struck to County which all get 16%)
2014 - 6.58%
2013 - 6.83%

Number of Investors who won liens:

2016 - 54
2015 - 68
2014 - 69
2013 - 106

Total Number of bids for all liens:

2016 - 3,348

2015 - 4,311
2014 - 6,254
2013 - 54,255,0890

You bid down the interest rate in 1% increments from 16% down to 0%.
Rate Percent that had the most number of bids overall:

2016 - 4% 867 bids

2015 - 5% 551 bids
2014 - 7% 1,162 bids
2013 - 7% 18,001,058 bids

Most bids per lien/parcel:

2016 - One lien had 21 bids

2015 - One lien had 35 bids
2014 - One lien had 38 bids
2013 - Two liens each had 482,840 bids

Results by Property Type minus the Struck to County (click on image to make larger):

[Jerry K.]

In AZ the winning bidder has the option to pay the subsequent taxes (sub taxes) on the parcel. AZ has a 3 year redemption period for the owner to pay the outstanding taxes and interest. After 3 years (from the sale date of the earliest lien) the owner of the tax lien can begin the tax lien foreclosure process.

An investor does not have to pay the sub taxes if they don't want to pay. That just means the lien for the current year unpaid taxes will be combined with the previous tax lien and sold again the next auction. However, check the county rules - Maricopa county allows an investor to keep their original lien (certificate) without having to pay the sub taxes. So you could end up buying a tax certificate in Maricopa this year that already has another investor holding last year's lien. You both would get paid off when the owner finally pays, but if the owner never pays, the other investor has a year head start on the 3 year redemption and could foreclose before you get the chance. You still get paid your lien and interest, but you may not have a chance to foreclose on the property before the previous lien holder forecloses.

Some investors (outside of Maricopa county) are only looking for the interest rate return. They won't pay the sub taxes knowing the lien will go back into the auction and when the new investor buys the lien, they will get paid at the end of the auction. It acts like a one year CD. However, if nobody buys the certificate, then the original owner won't get paid (until somebody does buy the lien or the owner pays the back taxes to the county).

I have one lien I bought a few years ago in an AZ county on a house currently worth about $800k. It was the second year of unpaid taxes and the previous lien holder did not pay the sub taxes. I have paid the sub taxes since then and next month I can begin a tax lien foreclosure. I fully expect the owner to pay the back taxes plus interest - why would anyone let an $800k house go for under $18k? They are living in the home.  Also, they did not get a mortgage through a bank when they bought it. There is a document filed with the recorder of deeds that shows they borrowed the money from a private party. They bought the home as a bank foreclosure and got it for a bargain (just under $400k and the previous owner to them had paid over $1 million) however, the current owners have been delinquent on taxes for years. If there was a bank mortgage involved, I'm sure the bank would be paying the taxes, but the private lender may not even know the owners are behind on taxes. 

So if the owners don't pay the taxes, I know the private lender will pay once they are notified when I start the foreclosure. The good news in AZ is that the owner/lender must pay all my attorney fees for starting the foreclosure in addition to the lien and interest.

If neither pays - then I end up with an $800k home for taxes and foreclosure fees. Realistically - not going to happen!