Another fact, Property tax bills comes due by March 31st in Florida and if they are not paid by then they are considered delinquent and could be sold at a public auction after 2 years. So what happens if a homeowner or lender doesn’t know their property taxes are due?
The tax assessors send tax bills to homeowners annually. If you haven’t received your property tax bill, or if your address differs from the one shown on your tax bill and you have a permanent change of address, you need to contact the county to update your mailing address. As investors we sometimes want to maintain our privacy but the tax bill is one area you want to make sure ‘the man’ knows exactly how to find you to deliver the bill and any other notices.
When a property has become so far delinquent that it is headed to the tax deed sale, the county sends out warning letters containing the notice of the auction. The letters go the property’s owners’ last known mailing address as well as other interested parties (lien holders). Although some counties will go the extra mile to research further if a property owners’ correct address, they are not required to bend over backwards to do this additional research.
Homeowners who fail to update their address will not get the tax bill nor the all important Notice of the Auction. This can pose an interesting problem for bidders at the auction. Bidders have to ascertain whether or not the county properly notified the owner in order to prevent the homeowner’s from challenging the sale later. Most counties have been conducting these sales for 100 years or more and are pretty good at notifying the owners and interested parties.
Part of the process involves: Advertising in the local public notice newspaper for several weeks prior to the public auction; It also involves sending regular mail and/or certified mail notices of the sale; There are times when a sheriff’s deputy is sent to serve the ‘interested parties’ with the official warning letter.
The warning letter contains the location of auction, amount of taxes owed, how to payoff the taxes (redeem) as well as how to make the payment to prevent the sale. Buying at the tax deed auction requires that bidders understand the Notification process in order to get marketable title later.
Tax collectors in Florida send out tax bills in October and offers discounts if the taxes are paid early:
4% discount if paid in November
3% discount if paid in December
2% discount if paid in January
1% discount if paid in February
The gross amount is due in March
*Answers: 1)Warren Buffett 2) The Spring
Those of you who have attended the tax deed auctions are very familiar with that term. The clerks gives this warning at the beginning of very auction. For such a small sentence it carries A LOT of weight. Why is this that important? This can mean you the property you bought can and will be subject to: taxes for the current year, Federal Tax Liens, and Municipal and Special District taxes, if any. And possible other liens if the tax deed process was not conducted properly. This is why you want to make sure you are really buying what you are bidding on and you have fully researched the property and looked at a complete title search history.
Let’s say you make a mistake and catch it in time and decide not to pay for the property after you have bid. Well, if you are in Orlando the Orange County Comptroller’s rules clearly state, “The first time a bidder defaults on a bid, s/he will be banned for the next 12 months from participating in our tax deed sale auctions. If the bidder defaults a second time, s/he will be banned for three years.” At this point you might be thinking you can outsmart them and bring someone else to bid for you until your ban is lifted, WRONG. The rules go on to say, “If it is determined that the high bidder designates someone else to bid for him or her at future sales of the parcel which said high bidder defaulted on, said high bidder will be banned from future tax deed sales for a specified period of time. Additionally, the Comptroller may recommend legal action regarding any bidder who defaults at any time.”
Bottom line, it’s not worth the hassle to bid on property you haven’t done your research on.
Originally posted to Blog on 12/7/2012
Three properties were auctioned off at an undisclosed Florida tax deed auction the last day of October. Take a look at how crowded the sale was as bidders nudged each other for room…NOT. This auction was more like a ghost town ironically on Halloween. Not a one person showed up to the auction. Despite the zero attendance the clerks in charge of the sale pushed their little cart with the files out at to the steps and began the auction anyway. Afterall it’s still a a state required tax sale whether or not there are bidders present… the auction must go one. By the way, all the three properties were vacant lots. What happens if no one bids on these properties? Sometimes they go directly to the tax certificate holder or they are put on a list that anyone can buy directly from after the sale. My first tax deed came off of one of those lists… we made $30,000 off it.
Originally posted to Blog on 11/5/2012
Announcement: I will be teaching the, “2 Day Tax Deed and Lien Field Trip.” I thought the field trip in September was going to be the last one of the year time but we are holding one more by popular demand. This one will be back in Orlando and not the Ft. Lauderdale/ Miami area. You can still register and learn from an expert on buying real estate through tax deeds and liens.
The first day is in house as I teach you how to do your research and due diligence on tax deeds and liens. The second day we all travel to an auction and get hands on experience. It’s not too late to book your seat and join the rest of us for an awesome event. Details & Sign Up Here .
Originally posted to Blog on 11/5/2012
Beginning in April, Lake County, Florida will begin selling properties through the tax deed auctions on the internet. The first online tax deed sale in Lake County will be on Tuesday, April 3rd. If you are interested in bidding there or getting more information about these sales, you can go to the Lake County auction site at www.lake.realtaxdeed.com. Real Auction hosts sales for many of the counties in Florida and will be doing the Lake County sale as well. If this will be your first time bidding at one of their online auctions, it’s probably a good idea to go to one of the two training classes (March 26 or 27th). The classes last about 90 minutes and cover the software only. Beware that you generally have to register for each county seperately even if you already are registered with Real Auction in another county. Click here for information on the training classes.
Originally posted to Blog on 3/12/2012
If you are buying tax deeds and paying with a cashier’s check you may want to make sure that you check with the county on their policy regarding when your tax deed will get recorded. Recently we bought a property and usually the way it works is that you pay your deposit at the time you win the auction and return either that day or within 24 hours to pay the balance off. Ordinarily the clerk’s office accepts cash or a cashier’s check and they promptly record your tax deed. Well not this time at this particular auction. They are now putting a 10 day hold on cashier’s checks.
Turns out someone burned them at a foreclosure auction, perhaps they stopped payment on a cashier’s check. Now the clerk in this particular county will not issue the deed until 10 days later if you are paying with a cashier’s check unless you are paying with cash. I guess you can bring cash, but… Got an Armed Guard? — to come with.
Originally posted to Blog on 2/9/2012
I was just showing someone how to use Google Streetview to see pictures of a house and neighborhood as though you were on the street when I SAW MYSELF and a friend in the streetview trying to break into a house we had just bought at the auction. I always wondered if people saw the vehicles coming… now I know they just creep up on ya! How long do these pictures last? Probably until they go back around to that neighborhood to get a new picture, which could be another year. Here’s something cool. If you click on the link it will take you to the streetview picture. If you zoom into the white truck’s glass you can see the reflection of the Google car as it rode by… it’s a green and white car that says Maps on it. bc they take it from the public street and don’t use the zoom it is completely legal but they could’ve at least tap the horn and given me a heads up so my booty wouldn’t been in shot!
Originally posted to Blog on 2/9/2012
Duval County’s tax sale, where Jacksonville is located, announces it is going digital. Beginning in January of 2012 the sale will be online. Jacksonville is the country’s largest city land-wise because the city is the entire county. Researching that sale is usually a mammoth task because the list is often 25-30 pages long on legal size paper! Yet, still the sale brought in about two hundreds investors from all over the country to crowd a large courtroom for sometimes 8 hours or until every property is sold.
The clerk who conducts the auction usually asks the crowd if they want to break for lunch or keep going. “Keep going,” everybody yells. I was among these die hard investors for years making it to Jacksonville at 7am after driving two and half hours. At least now the clerk will not have to worry about losing her voice half way through the sale. Whether it’s online or not, the hardest part about that auction remains to be researching all those property. You can view the list of properties coming up for sale along with other research you will need for the sale at www.FYITaxSaleList.com
Originally posted to Blog on 1/6/2012
One of the most popular questions people ask me, “Do bank mortgages really get wiped out by a tax deed sale?” Yes! As long as the bank was properly notified.
Recently an Appeals Court ruled against a mortgage company that tried to fight a tax deed sale. This all started about a year ago when Wells Fargo (formerly Wachovia) received notice that one of their Indiana properties they had a mortgage on was going to the tax deed sale. Instead of SOUNDING THE ALARMS at the bank (or going to DEFCON 1!) they sat on the notice and didn’t do anything until it was too late. Indiana like most tax deed states notifies mortgage holders of pending tax sales, Florida gives the lender at least 20 days to respond. Apparently nearly a month’s notice is just not enough time for the these banks to take action.
I often watch properties with a mortgage go to tax deed sale and sure enough, the larger the bank the less likely they will redeem the property in time. I don’t know if it is because these corporations are so big that information crawls at a slow pace up the corporate ladder or they just get more mail than they can handle. By the time the notice is given to someone who would know better… it’s too late. In most cases these notices are sent Certified Mail, which should indicate to the person receiving the mail… THIS MIGHT BE IMPORTANT. All I can say is their loss is sometimes a tax deed investors’ gain.
Wells Fargo fought the sale in trial court and when they lost there they filed an appeal. Wachovia appealed on the basis that they believed the notice should have been sent to an executive officer or agent of the company instead of how the State Law governing tax deeds dictates. This October the Appeals court ruled against them. Wells Fargo lost the case and their mortgage.
Indiana law says — Each tax sale notice must be sent to the owner of record at the last known address of the owner and to “any person with a substantial interest of public record at the address for the person included in the public record that indicates the interest.”
You can read more about the ruling in the Court of Appeals’ opinion .
Originally posted to Blog on 12/6/2011
Here is what I mentioned earlier. If you haven’t been bidding at the tax deed sale, you may not realize the deposit amount for a winning bid has increased. For each piece of property purchased, the successful high bidder is required to pay a non-refundable deposit equal to a minimum of exactly five percent (5%) of the final bid or $200.00, whichever is greater, at the time of the sale. So for example: If you are the high bidder at 10,000, you will be required to pay 5% of that 10,000 right away. In this case 5% of 10,000 is $500. If the 5% amount had been lower than $200 you would be required to pay $200. That’s where the 5% or $200 whichever is greater comes in. You can pay that deposit in the form of cash and/or cashier’s check. Increasing the amount required at opening bid may take some bidders out of the game and it may also reduces the number of properties you choose to bid on since you will need that 5% or $200 amount for EACH property you win at the auction.
In accordance with section 192.0105(3), Florida Statutes, the property owner can redeem his or her property (pay off the taxes) up until the time that the high bidder pays the full payment to the Clerk and the tax deed is issued. This means that you have not truly won the property until your payment is made preventing the homeowner from paying the taxes and keeping their property.
One more thing to remember, if you miss the deadline to get your deposit in electronically for the online sale you can always pay in person. You can make that deposit in person at the Clerk’s Office in the form of cash or cashier’s check no later than 3:00pm on the day before the sale.
Originally posted to Blog on