Marketing Your Property
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 15 years ago, 05/31/2009
marketing for tax sale properties
Hello, all, I'm wondering if anyone knows of a good mailer to send out to people who's home is coming up for tax sale or any other good marketing plan for this niche? Or there any other incentives to make a home owner who's property is about to go up for tax sale wanna sell their property, and what is a good approach?
Lenny, why would you want to contact someone whose property is about to go through a tax sale?
You can purchase that property at the tax sale for a whole lot less than what the owner would want for an outright sale of his property. Plus you as buyer or him as seller still must pay off the taxes due. So all you would be doing is increasing the cost of purchasing the property.
And you should check into the tax sale laws governing your area as there are some areas that state that you are not allowed to contact the current owners.
Originally posted by jawsette:
Actually, that's not always true. This also depends upon the location. For example, Ohio is a tax deed state that mandates by law that the real-estate tax sales start with a starting bid of at least 2/3 of its value. Even if someone were to win with the opening bid, then s/he would end up paying at least 70% to 75% by the time all of the other junk fees got thrown in.
Originally posted by Dory Peters:
Originally posted by jawsette:
Actually, that's not always true. This also depends upon the location. For example, Ohio is a tax deed state that mandates by law that the real-estate tax sales start with a starting bid of at least 2/3 of its value. Even if someone were to win with the opening bid, then s/he would end up paying at least 70% to 75% by the time all of the other junk fees got thrown in.
Actually in Ohio the State Statutes state
5721.16 Judgment of foreclosure and forfeiture - findings - order of sale.
(1) The fair market value of the parcel, as determined by the county auditor and as specified in the delinquent vacant land tax certificate or master list of delinquent vacant tracts, plus the costs incurred in the foreclosure and forfeiture proceeding;
(2) The total amount of the finding entered by the court, including all taxes, assessments, charges, penalties, and interest payable subsequent to the delivery to the county prosecuting attorney of the delinquent vacant land tax certificate or master list of delinquent vacant tracts and prior to the transfer of the deed of the parcel to the purchaser following confirmation of sale, plus the costs incurred in the foreclosure and forfeiture proceeding. For purposes of determining such amount, the county treasurer may estimate the amount of taxes, assessments, interest, penalties, and costs that will be payable at the time the deed of the property is transferred to the purchaser.
Notwithstanding the minimum sales price provisions of divisions (A)(1) and (2) of this section to the contrary, a parcel sold pursuant to this section shall not be sold for less than the amount described in division (A)(2) of this section if the highest bidder is the owner of record of the parcel immediately prior to the judgment of foreclosure or a member of the following class of parties connected to that owner: a member of that owner’s immediate family, a person with a power of attorney appointed by that owner who subsequently transfers the parcel to the owner, a sole proprietorship owned by that owner or a member of his immediate family, or a partnership, trust, business trust, corporation, or association in which the owner or a member of his immediate family owns or controls directly or indirectly more than fifty per cent. If a parcel sells for less than the amount described in division (A)(2) of this section, the officer conducting the sale shall require the buyer to complete an affidavit stating that the buyer is not the owner of record immediately prior to the judgment of foreclosure or a member of the specified class of parties connected to that owner, and the affidavit shall become part of the court records of the proceeding. If the county auditor discovers within three years after the date of the sale that a parcel was sold to that owner or a member of the specified class of parties connected to that owner for a price less than the amount so described, and if the parcel is still owned by that owner or a member of the specified class of parties connected to that owner, the auditor within thirty days after such discovery shall add the difference between that amount and the sale price to the amount of taxes that then stand charged against the parcel and is payable at the next succeeding date for payment of real property taxes. As used in this paragraph, “immediate family†means a spouse who resides in the same household and children.
It states that in no case can a property be sold for less than the taxes owed plus expenses not 2/3 of FMV
Originally posted by Lenny Reddic:
I have a letter I use specifically for this purpose - it works once in a while with good results. I don't mind forwarding it to anyone who wants to try it out - just email or message me.
But, I don't think it would work on a home or house, but it has worked on raw land, or land with derelict buildings on it -- they won't be livable.
Nutshell, before the tax sale offer owners $100 for a quit claim deed. I've had three take money and deed over their property. What were they? An abandoned mobile home park, a 1/6 interest in a patented lead/silver/zinc mine (30 acres), and a substandard lot next to a creek in a High Sierra ski town.
Tax sales are fun, but sometimes they get out of control with bids, that is one reason why it can be profitable to buy prior. Also, you can sometimes get the feeling of control when you buy prior - your actions removed this property from sale, often last minute - many still show up to buy said property without even knowing you did some legwork behind the scenes and now own it.
Of course you are on the hook for the back taxes, they are published, no suprises, no bidding wars. If the back taxes are too much then just skip it.
The problem with that plan is that since you removed the property from the tax sale, all liens that were on the property are still in force and if you accept the property you may be required to payoff the lien or recieve a clouded title which the lienholder can foreclose on since they are still in 1st position.
The "behind the scenes" legwork must include much more than just a letter sent to owners.
The properties I have removed/redeemed from sales don't have any liens on them (except the tax collectors). Where I live many lots go to the tax sale that are free and clear already of any encumbrances.
Like I said this method won't work in every case, and you are right there are a couple more steps than just sending a letter - when you get a response from the letter you need to take action. I've also found that including a couple dollar bills in the initial letter gets a better response.
I would say to go one step further, in that you should not contact anyone, by letter, until you have done some of that due diligence. Especially the lien factor. If your letter is worded wrong it will be recieved as an offer to buy and you could be stuck with defending yourself in a lawsuit, if nothing else.
This is not to say that it cant be done well and also be very profitable to someone. But unlike the guru's I like to put out there the potential downfalls that some will fall into if they are not careful.
It's important read all of the code (http://codes.ohio.gov/orc/323) before citing it:
323.28 Finding and decree - appraisal and sale of property - proceeds of sale.
(A) A finding shall be entered in a proceeding under section 323.25 of the Revised Code for taxes, assessments, penalties, interest, and charges due and payable at the time the deed of real property sold or transferred under this section is transferred to the purchaser or transferee, plus the cost of the proceeding. For purposes of determining such amount, the county treasurer may estimate the amount of taxes, assessments, interest, penalties, charges, and costs that will be payable at the time the deed of the property is transferred to the purchaser or transferee.
The court of common pleas, a municipal court with jurisdiction, or the county board of revision with jurisdiction pursuant to section 323.66 of the Revised Code shall order such premises to be transferred pursuant to division (E) of this section or shall order such premises to be sold for payment of the finding, but for not less than either of the following, unless the county treasurer applies for an appraisal:
(1) The total amount of such finding;
(2) The fair market value of the premises, as determined by the county auditor, plus the cost of the proceeding.
If the county treasurer applies for an appraisal, the premises shall be appraised in the manner provided by section 2329.17 of the Revised Code, and shall be sold for at least two-thirds of the appraised value.
I'm originally from Cuyahoga county, and I know that Cuyahoga county usually invokes that statute.
Dory, thank you for proving my point.
The amount of taxes, interest and penalty is exactly
And the next section says the LESSER of either 1 or 2.
You're ignoring the following: "Notwithstanding the minimum sales price provisions of divisions (A)(1) and (2) of this section to the contrary, a parcel sold pursuant to this section shall not be sold for less than the amount described in division (A)(1) of this section. . . ."
In practice (at least in several of the auctions in Cuyahoga, Medina, Portage, Summit, Stark, and Franklin counties), I've never seen that minimum to be interpreted as less than 2/3 of the value of the property (neither in any of the county auditor's printed materials, nor in any of the sherrifs auction ads in the respective local papers). This interpretation is also consistent with the the answer that a family friend (who happens to be a Cuyahoga county judge) gave me on this topic about 1-2 years ago.
I'd love to be wrong about this; that would represent forward progress IMHO. However, I don't see that happening anytime soon--especially due to the major budget crunch issues going on at the state, county, and local levels all across Ohio.
I just quoted your post of a1 which states: assessemnts, penalties, interest, and charges
That is taxes due plus interest and penalties. It has nothing to due with the 2/3 interpertation that is being applied to this.
The fact is that it can be sold for less than 2/3 or FMV if those taxes, interest, and penalties are less than 2/3 FMV.
I do understand that many auction houses and courts will get as much as they can get away with because they are in a tight financial crunch, but the statement of law says they can IF THEY CHOOSE TO.
If they do not choose to do so, then I would not deal with them. There are other counties out there that do apply the law as the law states.
Wow, Jim, you're pretty fast too. :cool:
So, is TN a tax lien or deed state?
It is a tax deed redemption state.
Things are changing and have been for a few years now. It used to be tax certificate, tax lien, or tax deed.
But nowadays tax deed are acting like tax liens are described to act with a redemption period.
323.28 Finding and decree - appraisal and sale of property - proceeds of sale.
(A) A finding shall be entered in a proceeding under section 323.25 of the Revised Code for taxes, assessments, penalties, interest, and charges due and payable at the time the deed of real property sold or transferred under this section is transferred to the purchaser or transferee, plus the cost of the proceeding. For purposes of determining such amount, the county treasurer may estimate the amount of taxes, assessments, interest, penalties, charges, and costs that will be payable at the time the deed of the property is transferred to the purchaser or transferee.
The court of common pleas, a municipal court with jurisdiction, or the county board of revision with jurisdiction pursuant to section 323.66 of the Revised Code shall order such premises to be transferred pursuant to division (E) of this section or shall order such premises to be sold for payment of the finding, but for not less than either of the following, unless the county treasurer applies for an appraisal:
(1) The total amount of such finding;
(2) The fair market value of the premises, as determined by the county auditor, plus the cost of the proceeding.
If the county treasurer applies for an appraisal, the premises shall be appraised in the manner provided by section 2329.17 of the Revised Code, and shall be sold for at least two-thirds of the appraised value.
Notwithstanding the minimum sales price provisions of divisions (A)(1) and (2) of this section to the contrary, a parcel sold pursuant to this section shall not be sold for less than the amount described in division (A)(1) of this section if the highest bidder is the owner of record of the parcel immediately prior to the judgment of foreclosure or a member of the following class of parties connected to that owner: a member of that owner’s immediate family, a person with a power of attorney appointed by that owner who subsequently transfers the parcel to the owner, a sole proprietorship owned by that owner or a member of the owner’s immediate family, or partnership, trust, business trust, corporation, or association in which the owner or a member of the owner’s immediate family owns or controls directly or indirectly more than fifty per cent. If a parcel sells for less than the amount described in division (A)(1) of this section, the officer conducting the sale shall require the buyer to complete an affidavit stating that the buyer is not the owner of record immediately prior to the judgment of foreclosure or a member of the specified class of parties connected to that owner, and the affidavit shall become part of the court records of the proceeding. If the county auditor discovers within three years after the date of the sale that a parcel was sold to that owner or a member of the specified class of parties connected to that owner for a price less than the amount so described, and if the parcel is still owned by that owner or a member of the specified class of parties connected to that owner, the auditor within thirty days after such discovery shall add the difference between that amount and the sale price to the amount of taxes that then stand charged against the parcel and is payable at the next succeeding date for payment of real property taxes. As used in this paragraph, “immediate family†means a spouse who resides in the same household and children.
Dory: For your information, if it is not allowed for a sales to be less than A1, then why is there a provision in the statues that states that (I put it in bold) states if it is sold for less than A1?
Would this not indicate that it can be done, since the law stipulates what is to happen if this happens?
Jim, you've got me there. I think that bold text is pretty odd--especially since it possibly conflicts with the statement: "Notwithstanding . . . a parcel sold pursuant to this section shall not be sold for less than the amount described in division (A)(1). . . ."
How could a parcel be sold for less than 'total amount' (according to the bold text) if it shall not be sold for less than that 'total amount' (according to the 'Notwithstanding' clause)?
To me it reads like they can do whatever they want, and in practice they (at least in the aforementioned counties) tend to structure the auctions as reserved auctions with the minimum bid set at 2/3 of the value of the parcel. Perhaps, that latter clause was added to help move properties that don't sell at the initial tax auction. (Just a guess.)
The purpose for the county treasurer calling for an audit is because the taxes owed (section A1) is more the value of the property and this gives him permission to sell the property at the auction for 2/3 of the value which is lower than the amount of the taxes which are due.
That is the intention of the 2/3 FMV valuation statement. If the county treasurer does not ask for a valuation then he can sell for the amount of the taxes which is lower than 2/3 of FMV.
So it is not law that he must sell for 2/3 of FMV because he is not required to ask for a valuation.
It may be his normal routine, but he does not have to by law. That is why I say stay away from that county until it is worth it for you to purchase that property at that price.