Perhaps the most important question of them all if you ever plan on getting started . . . who handles tax sale auctions? In this video we answer that question!
Transcript:
Casey Denman here with TaxSaleAcademy.com. In this video, we’re talking about who handles tax sale auctions.
This is probably the most important question of them all because if you don’t know who’ll handle the auction, you’re not going to get a tax sale list, you’re not going to know when the auction is, and that’s going to definitely hurt you when you go to buy properties at tax sale auction because, after all, you won’t know how to find the auction.
Now, the answer here can vary from state to state and from county to county, but it’s going to be held by one of two types of people. The first one is it’s going to be held by the county themselves. The county is going to take care of everything. They’re going to send out the tax bills, they’re going to accept the tax payments, they’re going to send the late notices, they’re going to foreclose the properties, they’re going to handle the marketing of the properties and they’re going to do everything that’s required by state statute. They’re going to hold the sale, they’re going to issue the deed, accept the money and all that good stuff. They’re going to do everything from A to Z.
Now the good thing is that you don’t, as a tax sale investor, you won’t have to pay any sort of buyer’s premium. You won’t be required to pay 10% or 15% above and beyond your cost. The bad thing here is that the counties usually won’t provide a whole lot of additional information. Majority of the time, they’re going to say, “Here’s the legal description. If you want to buy it, good luck! Make sure you do your due diligence.”
Now, some counties are proactive and some will send them out. They’ll send people out to take pictures and gather information and they’ll say, “Here’s our information, but of course, you still are required to do your due diligence to confirm our information is accurate.” But when it comes down to it, most counties are just going to say, “Here’s the legal description. Take it or leave it. We don’t care. Good luck with your bidding.”
Now the second type of person that handles tax sale auction is a private company. The county will actually contract with a private company, and the private company will do as much or as little as the county wants them to do. It just basically depends on what the county wants. I’ve seen situations where a private company is involved very, very little. It’s more or less an auctioneer that comes in, whoever the county decides, and the auctioneer auctions the property off. They don’t handle anything else. They don’t accept money, they don’t issue the deeds or anything like that. They’re just somebody that accepts bids verbally or with a bidder number or whatnot.
And then I’ve seen counties that contract with private companies, and the private company does a lot of work. They’ll send out late notices, they do all the title searches and stuff that are required by the county as far as the state statute goes. Then they’ll handle the auction process. They’ll accept the money, they’ll disburse the money to the county. They’ll even prepare and record the deeds for you. They do everything from A to Z. So it just kind of depends on what the county’s relationship is with this private auction company.
The great thing about dealing with private auction companies is they usually get some sort of percentage of sales. So they’re going to want the sales to go as high as possible, which means they’re going to provide a load of information, or at least as much as they can. I’ve seen auction companies that will literally visit 5,000 or 10,000 properties every year. They’ll take pictures of these properties. They’ll give you all sorts of notes. They’ll talk to the neighbors. They’ll do everything they can to raise those bids because their pay is based off the selling price of those properties.
And of course, the bad thing here is also there is a buyer’s premium. Their pay, like I said, is based off the selling price. So the buyer’s premium might be 10%, 12%, 15%, which of course adds to your bottom line as a tax sale investor.
The best way to determine who handles the tax sale auctions is by simply calling the county and ask. If you don’t know which department of the county to call, the first place to start with is the Tax Collector. The one that actually collects the money, the one you would mail your tax payments to. Call them and say, “Listen, are you also the office that handles the tax sales or does another office handle it?” Sometimes, it will be a different office. Sometimes, it will be the same office. So just call the tax collector of the county that you’re interested in bidding on. Ask them who handles the tax sale auction. And right there, you have a great place to start your tax sale research.
I hope you’ve enjoyed this video. If you’d like more information about the very lucrative tax sale business, head on over to my website. And you can do that by clicking the blue link right here next to my head. It will take you to TaxSaleAcademy.com. While you’re there, download your free copy of my e-book, The Tax Sale Blueprint, which is a great way to get you started in your very successful tax sale investing career.
Have a great day, folks! Take care! Bye-bye.