There was a time when a real estate office looked for “location, location, location.” None was more visible than the old Tracy Lewis office near the airport. Without fail, each year at tax sale time, a steady stream of hopeful bidders stopped by looking for free value advice and, of course, free maps. They always promised to list any property they “won.” I didn’t hold my breath. Most didn’t know the area and didn’t really ask the right questions.
What to Know Before You Bid
Then as now, the newspaper publication clearly stated that properties were conveyed “AS IS AND WITHOUT ANY WARRANTIES AS TO TITLE OR PHYSICAL CONDITION.” Even though it’s in bold letters, bidders are so excited about getting “a deal” they didn’t think past the auction. A tax deed is like a quit claim deed (you get whatever the County has) with the caveat that the property has a 1 year right of redemption. This means the foreclosed owner can redeem the property for up to a year. Simple, right? You bid, you win, you wait the year and do what you wish… NOT SO FAST!!!
Before you bid, you should determine the state of title. The County does request a prelim on each property. Be sure it’s current. As the proud new owner, you could be responsible for clearing income tax liens, child support liens, mortgages, past due association dues and in some cases dealing with heirs/additional owners (the word “exceptions” in Schedule B could refer to hundreds unknown heirs). Hence, you will need to determine which property you are bidding on in advance in order to review the prelim. But wait…there’s more.
What About Title Insurance?
You should know that when it’s time for you to sell the property, it’s very difficult to get title insurance. Title insurance is important. Title companies who might insure want to ensure that the delinquent tax payer received actual notice (not just notice in the paper) of the upcoming sale. A cashed check could suffice, but it’s really up to the title company. Remember as well, that the county allows anyone to pay taxes. In other words, the actual title holder may not be getting delinquent notices. Agreements of Sale are a bit more tricky. With those, the note/mortgage holder retains actual title while the owner of record has equitable title. Again, it would be up to the title company to determine if the person who received service is sufficient. Without proper notice, even heirs of a deceased owner could step in to re-assert ownership. And, by the way, you should probably look at the property…but that’s a story for another day. Happy bidding and good luck.
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