Tax Sale Day, And What Comes After

The Day of The Sale

So you’ve made it to sale day, and your goal property is still on the sale list. That’s good news. The chances of a 9^th inning save by the original owner is slim at this point, but possible, as they can pay things off up to just before the sale starts. Get there early, as the collector’s office will be busy preparing for the sale. Check in, and make sure your buying number is obtained if they use them, or that you are set up to bid in the way they chose. They will usually have an updated list the day of sale, or you can print one from the website. Make sure you have a copy of the entire offering list. You will also need to be sure you have all your funding with you to pay for the property shortly after the sale. These sales are, generally speaking, actually held on the courthouse steps, so prepare for the weather of the day. They may move inside in inclement weather, but there is no guarantee.

Having the list and a way to keep track of the properties and sales as they progress is important. They generally sell properties in the order listed, so be prepared to bid when they get to your property. This usually is slower paced than a traditional auction, but they can still move fast. Be prepared, but keep track of what properties sell, if the same person is buying several or if there are a lot of individual buyers. The more people that buy properties and leave, the better for you! If there is a single person buying multiple properties, try to think if they are all close together or in some way connected that would have that person interested, it may not affect you, but it could. Still, the more people spend on other properties before your target property, the less competition you may have.

When they get to your property, they will announce the property, then what the taxes and fees are in total. That will be the opening bid. If you can be the opening bid, you should. Seeming to be aggressive early can hold off other bidders that aren’t as committed. Still, be prepared for competition, and know your upper bid limit. Just like any other auction, if someone is bidding they will raise the bid incrementally until someone stops bidding. Again, there is no upper limit on what a property can sell for, so pay attention to your budget and don’t go overboard. One of the goals of buying property this way is to be budget friendly. The auctioneer, in our normal case, is the collector, so it’s a slower pace and easy to keep up. Bid promptly when the bid is yours to take if you want to go up in price, again, to hopefully discourage the less enthusiastic bidder if there is one. The best outcome would obviously be that you make the opening bid, and no one else bids, so you would get the property at the baseline price. Hopefully, you’ve one the bid and can now pay for the property. It will take a little while for them to process things and be ready for you to pay, so now’s the time for a bathroom or coffee break. Once they have your listing ready for you, pay the collector and they will provide you with the initial receipt of sale. Our collector’s office provides a packet at time of payment that contains all of Missouri’s legal information that you must abide by to obtain the collector’s title to the property. Which, depending on which “offering” stage the property is in, varies.

After the Sale

You now own the tax lien on the property. That does not mean you physically own it yet, only that you are on the path to ownership. Hopefully the collector’s office has provided you with a packet on how to properly redeem the property to get the title. This process varies greatly by State, and sometimes can vary by county. If they do not provide a packet, ask them for any resources you should use. In Missouri for instance, the laws applicable to tax redemption all fall in the RsMo 140.010 through 140.722. The most important and relevant part of Missouri’s Law for our purpose is RsMo 140.405 and 140.340. These outline benchmarks and processes for obtaining your properties title. I can’t overstate the importance of asking the collector for help in getting the information you need. For example, in Missouri, redemption periods are generally no longer than 1 year and as little as 90 days. In states like Arizona, redemption periods last 3 years before you can start the process of obtaining the title to the property. These details can have a large impact on your search and potential possession of the property. Make sure to list all important legal benchmarks on a calander you use as a reminder. Timing matters a lot in these matters. In short, do a lot of research before and while you are going through this process. Unlike a traditional real-estate purchase, you are at risk losing the property for a period, though you will get your money back. If you complete the steps and obtain title though, you’ve likely bought something you may not have been able to get in any other way, at a reduced price.

I definitely recommend looking into this process for purchasing property. Especially if you live in an area where it is more rural and opportunities exist for good sized lots that no one has an interest in. Good luck and happy bidding!