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soma
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# Posted: 12 Jan 2015 07:52pm
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I'm looking at some tax forfeited land in my area, and each of the listings I see have a taxable amount. Is this the amount the land typically sells for? Or would the county start the bidding at a lower amount?
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adakseabee
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# Posted: 12 Jan 2015 08:10pm
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I bought 5 acres of tax forfeited land for $2,000.00 in 2002. The bid amount was a swag on my part based on what I knew to be reasonable prices for agricultural land gone wild. It is currently assessed by the county at sixteen thousand dollars. The sale from the county to me was by sealed bid. Annual taxes have averaged about $300.00, so my bid was very likely much higher than was owed the county by the previous owner. All paperwork was between me and the county treasurer. I suggest you contact the county treasurer for the process.
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brooksm29
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# Posted: 12 Jan 2015 11:54pm
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I bought some property at the tax auction through my county. They actually conducted 2 auctions for these properties. They had the intial auction that started at the amount of taxes due and then the properties that didnt sell, went to a no reserve auction. I am pretty sure that the taxable amount only indicates what you would expect to pay taxes on in the future. I say this because the amount I just got charged for my taxes was actually more than the price I paid for the property.
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VC_fan
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# Posted: 13 Jan 2015 04:16pm
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In Ohio, the "tax value" is the assessed value - what the county assessor says the property is worth and what the owner pays taxes on. At the sheriff's sale the property can't be sold for less than 2/3 of that value. So by stating the tax value they're also stating the minimum bid. Especially with undeveloped land, it's been my observation that there may not be much correlation between assessed value and market value. My understanding...
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Littlecooner
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# Posted: 14 Jan 2015 09:32am
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soma
Do a little homework on the internet for some state rules for tax sales. Each State has different rules for the various time frames on these transactions. Taxes are due each year on real estate and when someone does not pay the bill, the county receives their money via a "tax sale". So - yes, the minimum "bid" will be the amount of tax owed - that's the county's reason for the tax sale, to obtain their money. Most tax sale property sells for the amount owed unless it is an unusual property.
What you are "buying" is a tax lien on that particular property. you will have a statutory number of years (depends on your State's guidelines) that you will continue to pay the taxes each year while your lien ripens into the ability to obtain a tax deed from the county. The original owner during this time has the ability to pay his taxes up to date, where he would have to pay off your "lien" plus interest. If he does not, then you can apply and obtain a tax deed to the property. In some states, the original owner still has a right of redemption where he can come pay all those back taxes and restore title in the property to him.
Taxes are based on the appraised value of the real estate, so annual taxes will be close to the amount of the "original starting bid" as you called it. This will be adjusted to current market values in your neighborhood as time progress.
I have never looked at purchasing a parcel with some improvements ( house, etc) as there is usually just some glitch in the tax payment process that will never ripen into a deed for the property. Properties change hands, someone forgets to pay taxes, etc. Where you may pick up a parcel is the vacant small tract, especially one where the owner is a non resident of that county. Do some homework on the internet. Could be the previous owner has died and the heirs did not pay taxes. I am waiting on my tax deed for something I purchased 4 years ago by just paying the taxes, which were less than $ 50 on a vacant 5 acre tract of land in the west part of the US. a little google of the owner showed up as a obit of an old gentleman back then and the family just never paid the taxes. When I get my deed, I will have about $ 250 invested in a 5 acre tract in the great American west. Good luck. Do you homework, its money in your pocket that you do not have to spent today and could be a great deal years from now when you want to sell.
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Littlecooner
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# Posted: 14 Jan 2015 09:51am
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VC_fan
No disrespect, but market value and assessed value do have a definite relationship. Properties are appraised at "market value" by highly trained professionals in the county government and 99.999% of the time, they will be within a 10% amount of what the property would bring if sold in a normal arms length transaction. the assessed value is a definite number affixed by the State government as a percentage of the market value. ie - a residential property may be valued at $ 100,000. The State law may say that it falls into a class of real estate that is to be taxed at an assessed value of 10%, so the tax bill is calculated by the millage rate for the community times $ 10,000. It could be a rental property that State law says will be taxed at 20% of its appraised value. So the tax bill is twice as high for the same property if its a rental home owned by an investor instead of the person living in the home. Then if its owned by a utility, or other type corporations, State law may say the assessed value is 30% of the appraised value. This is the reason taxes as based on assessed value, which is always some percentage (as defined by the State) of the appraised value which is the current market value.
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soma
Member
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# Posted: 15 Jan 2015 11:24am
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Hi everyone, this is all very wonderful information. Thanks!
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TheWildMan
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# Posted: 15 Jan 2015 02:03pm
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no, the back amount is only what the county, state etc wants, if its less then they take a loss and just assume the new owner will pay annually unlike the last owner, if it sells for more then the county makes a profit.
i have seen auctions where land did not sell at all, no bidders, so it was cycled to the following year, one i almost bought like that was 2 acres of waterfront property, landlocked except a private road through a cemetary, $50 bid would have won it, took 4 years till someone bought it and the back taxes were only about $30 a year.
I bought a condemned house in 2000 for $4000, had a toolshed, outhouse and an acre of land in the country, adjacent property was a 5000 acre state forest. back taxes owed was only $800, the last owner died and no one claimed the place as inheritence. I fixed it up and sold it in 2008 after living in it for 8 years.
it depends on who else wants it and how much they are willing to pay, back tax value is only how much the last owner needs to pay in order to keep it.
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