Transcript:
Welcome to the Tax Sale Podcast, where tax sale investing is made easy. My name is Casey Denman, I’m a tax sale veteran, the leading tax sale expert, author of The Tax Sale Playbook, founder of The Tax Sale Academy and I’m your host right here on The Tax Sale Podcast.

Thank you so much for joining me on today’s podcast episode. This is a completely free podcast and is brought to you through and because of The Tax Sale Academy. If you’re looking to learn more about investing in tax defaulted real estate, just head to TaxSaleAcademy.com. Again that’s TaxSaleAcademy.com.

So, as I’m sure you’ve noticed, we’re in a time where everything is moving online. It wasn’t all that long ago when online tax sales were a rarity. Now, there a very normal occurrence. While the trend to move tax sale online has been taking place, when the Coronavirus hit it seemed to really expedite the process for many counties. Naturally, there are still many, many counties that aren’t online and might never be, but the number of counties that sell tax defaulted real estate online has certainly doubled in the last year or two. So I wanted to record today’s podcast episode to go over ten tips that I have when it comes to attending online tax sales.

I also should note that there are a number of different styles of online auctions – these tips can be applied to just about all of them.

The first tip is to preregister well in advance. Once you’ve established that the tax sale is online, go ahead and create an account. Often times, this will be a very easy process. Like registering for any other online account. Some times though, it will be much more difficult. I’ve run into technical issues before that have delayed my registration days. I’ve registered and thought everything was fine, only to be asked for some sort of identity verification a week or two later. Depending on the platform being used, it could take you days or weeks before hearing back if you run into any sort of trouble. Do not wait until the last minute to register!

Another one is to place your deposit early. Now, I completely get the fact that you don’t want money sitting in someone else’s account. But hear me out. Some auction companies will require a credit card hold. Maybe it’s $1,000 in order to bid for example. A $1,000 transaction through an online auction platform has a pretty high chance of being flagged as fraud by your card issuer, which means going through the entire process of calling your issuer, telling them it’s ok to proceed and all of that. Other auction companies will require that you actually send a deposit to them and maybe that’s a flat rate deposit or maybe it’s a percentage of whatever you think you’ll bid. And that deposit is usually through a wire transfer or ACH transfer and these things can take time. And even if they receive it the same day, many auction companies have to physically credit it to your account. This also takes time. There is no reason to wait until the very last minute. Go ahead and get your deposit in. And make sure it’s enough.

Another tip is to familiarize yourself with the software. And even if you’re super tech savvy, this one still applies. Once you create your account and you’re allowed inside the bidding platform, browse around. Spend time learning what everything does. Not only can this help you with the way you function, it’s pretty important to be able to bid, right? Besides that you can certainly learn some interesting things. Some platforms have really neat statistics that can help you determine what it’ll take for a successful bid. Some might show bidder names or other interesting stuff. So it’s very helpful to spend some time learning the platform – and on that same not, a lot of these platforms have training videos. Don’t discount those as too amateurish for you. Most are certainly worth the watch.

The next one is to know the rules. Obviously, this is important when it comes to the tax sale business. Knowing the laws, rules and customs are very important. But what are the rules of the platform? What happens if the platform just stops working? I had this situation once, I actually recorded a podcast about it – the way it turned out is the platform came back live about 3 hours later and I was the only one bidding. It was the best day of my tax sale career. Besides something that extravagant, what are the other rules that impact you? How long do you have to pay? What if your deposit isn’t enough? How does the proxy bid system compare to the live bid? Who wins for ties? All of these issues and so many more impact your ability to successfully invest so it’s definitely worth the time to know the rules that apply to you.

The next tip is to arrive early. At an in person auction I always arrive early. This is so I can make sure I’m registered, pick out a good seat and get comfortable. For an online auction, it’s very similar. First off, I want to make sure my computer and internet are working. It seems that technology breaks when we need it most. Secondly, I want to make sure everything performs like it should when I log in – including my username and password. I also want to make sure that there aren’t any last minute changes, like properties being removed – in some areas, there usually are some sort of last minute changed. This can wreck havoc on your plans when you login at the last minute and can’t figure out which properties are being auctioned off, only to realize that the order has been changed, that properties have been pulled from the auction or there are some other sort of issues. And lastly, it just allows you to get comfortable and generally makes everything less stressful than rushing to login at the last second.

Another tip is to treat it like an in person auction. Just because it’s more convenient than actually driving to an auction doesn’t mean you should be lackadaisical in your approach. I treat online auctions just like in person auctions. This means that I walk into my office or wherever I’m at prepared. Even though I can easily use excel or something on my compute, which is fine it you do, I still like printing out the actual bid sheets along with the tax sale list. I’ll then take a pen out and follow it down one by one, just like I’m sitting in the second row at an auction. I’ll make notes on what sells, how much it sells for and will follow along closely. This helps me to maintain some sort of normalcy in the routines that I use, which insures I maintain focus.

And speaking of that, FOCUS is our next tip. At inperson auctions, our focus is usually lost when someone starts talking to us. We can easily break this when we are short with the conversation. But when it comes to online auctions, we usually are the ones who break our own focus. You have to remember that you’re buying real estate. You should be as focused as possible. This is not a time to talk on the phone, to browse your phone or to have multiple tabs open as you attempt to multi task. My advice is to have one tab open which is the auction tab, have it maximized and don’t do anything but focus on the auction you’re virtually attending.

Here’s another tip: Be Ready to Bid. I know this sounds obvious, but this is one of those elementary things that people tend to overlook. I’m guilty of this myself. One strategy that many bidders like to use is trying to sneak in a last minute bid. You know, where the auctioneer says: Going Once, Going Twice, Going . . . . and then the last minute bid comes. That might work at in person auctions, but with online auctions it’s a huge gamble. The automated systems will have a timer built in. And you might be able to time it correctly quite a bit, but if it doesn’t register your bit within one millisecond, you’ve lost that property. For the online auctions that are moderated by a company where they manually end the bidding, you’re really playing with fire. Especially where you have a long auction or the auctioneer is just sick of being there that day. I’ve seen plenty of auctions get to the point where the moderator speeds up the process from the standard timing to a very quick going once-twice-sold, next property.

Next tip: Stick Around. I highly suggest not leaving mid auction, despite how bad you might thinkg it is going for you. There are two reasons for this: First off, I’ve been to many, many auctions that started out incredibly strong – that is, the prices were ridiculous. And then, over time, the prices started to come down more and more until the last few properties had virtually no other bidders. And as difficult as it might be, the longer the auction, the more I suggest you stay until the very end. The second reason involves any changes to the auction. With an automated auction, the system handles most stuff exactly as it should. So this one applies primarily to the online auctions that are handled remotely by county or auction company staff. I’ve seen properties skipped and added onto the end of the auction. I’ve seen situations where bidders have backed out mid auction, so the properties get reauctioned at the very end. And there are plenty of other unusual situations where you can cashin as the very end of the auction. Obviously, these are regular occurences, but sticking around to the end can reap benefits when the timing is right.

And the last tip I have for online auctions today is to followup. Just because you won the bid, doesn’t necessarily mean you’ll automatically get the property. In fact, you won’t get the property unless you meet the rest of the terms of that auction. The process is not over once the auction is over. At an in person auction you can generally win, pay and checkout, go home and wiat for the deed. With an online auction, you’ll generally win then need to go through the process to make the payment. I HIGHLY suggest that you handle everything as soon as possible after the auction ends – you updated deed information if required, you make payment and do anything else the county requires. And once you make payment, unless it’s an automated process that provides a confirmation number, be sure to email the company or otherwise get confirmation that everything is good to go. I’ve seen a few situations before where one minor mistake has cancelled a sale. Don’t let this happen to you.

So, there it is. There are ten tips for online tax sale auctions. This industry is migrating online, so be sure to take the time to learn about the online sales, the best practices and the process used by your area. By doing so, and doing so now, as early in this process as possible you’ll be able to reap the benefits long term.

I truly hope that this episode has helped you out. If so, please leave us a positive review on whatever podcasting plaform you’re listening to us on. And If I can be of any additional help, there are a bunch of links in today’s show notes, including one to our primary site at taxsaleacademy.com. Take care folks and we’ll see you next time righ there on the tax sale podcast.