Land Tax Sale legalities - What to expect?

Question

Hello BP,

I am considering a few properties in a upcoming land tax sale. The city is recommending on there website to consult an attorney prior to bidding.

" We strenuously suggest that you consult an attorney before bidding on any parcel of property"

I have never attempted this before, what sort of repercussions should I potentially expect from the purchase of these properties?

Thanks!

Anastasia Jordan · Answer

Oh and dont just go to any lawyer. You have to find out who the expert is in your area.  Make sure you understand the laws. Main thing is to know when you can take posession, how long the previous owner has to redeem, and what needs to be done to get clear & marketable title.

Do as much research as you can on the property. Do a site visit and review it as much as possible without violating the law. Do a title search. Do a background check on those who hold title or may have a claim to it. Research permits that have been pulled on the property and those companies.

Anastasia Jordan · Answer

Voided tax sale.

Redemption.

Failed redemption attempt and salty ex-owner starts slandering your good name.

Arson.

Sewer liens.

Repair bills that exceeds what you are willing to invest.

Squatters.

Stalkers.

Bunch of broke people begging to rent.

Property line disputes with neighbors who took advantage of the distressed property.

Having to drag out getting a quit claim deed due to a family feud.

Causing a family feud because they didn't know their drug addicted family member didn't pay the taxes on the family home.

Cannibalistic pitbulls.

Haters.

Buying a tax lien on a property where wholesalers claim neighborhoods like gang territories and attempt to bully you.

Karl Behnke · Answer

Hey David,

This particular house had several issues, starting with the city not properly notifying the current owner(who is dead??) and there was also a 12k federal tax lien. My attorney advised to let this one go, I will be receiving a full refund from the city in 3 weeks, only because of there notification mistake.

David Hart · Answer

@Anastasia Jordan - I, too, appreciate you sharing your experience with Tax Sale properties. It's those unknown "pitfalls" that we REALLY need to consider. Thank you for listing out some of them, along with some potential tips on how to avoid them!

@Karl Behnke - Was your SFR in St. Louis? I'm very interested in learning more about how this all unfolds for you. Can you provide any more details at this point? What did your lawyer come up with? Are the tenants going to be a problem? Did you purchase from the the Tax Sale auction?

Anastasia Jordan · Answer

Review any permits pulled can give you an idea of what was going on prior to you taking posession of the property.  I've contacted previous contractors and asked if they even got paid. That can give you an idea if redemption would even happen. If they didn't have the money to pay the contractors or their taxes, they are not going to have money to pay you.   From my understanding yes you would have to repull permits as you can not work under previous permits even if they are still open.  On my house I had to get rewired they found where the previous electrician did not do some things correctly.

Karl Behnke · Answer

Thanks for the responses!

This is great information to consider. I decided to purchase one SFR for $6,300 in a c+ class neighborhood. I currently have a real estate lawyer working on my confirmation of sale. HOPEFULLY everything goes smoothly. There are people living in the residence, so I'm sure it will get interesting.

Troy H. · Answer

@Anastasia Jordan I have gone back and forth with the idea of tax sales. Thanks so much for your input it was very helpful.

Ned Carey · Answer

@Karl Behnke  You  got a good list of tax sale risks from @Anastasia Jordan however you need to add to that the risk of land. Dealing with raw land can be quite complex. There are zoning and environmental issues that can dramatically affect what you can do with the property. Those issues in turn greatly affect the value.

Rick Wang · Answer

@Anastasia Jordan I take it you speak from experience.  Thank you for sharing that.  What's the significance of the pulled permits?  Are you saying if those permits are not up to code, once you take over the property you would need to re-apply for those permits to get them approved, pay a fine, fix those that were not done correctly to get them up to code or worse yet, be forced to tear them down?  Thanks for your input in advance.

Rick

Land Tax Sale legalities - What to expect?

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