how do you find out information about when the auctions are, and what will be in them?

Don't know how it works North of the border but in the US notice has to be published.

In most cities there's some sort of legal newspaper, not necessarily the local dailies, that publish notices of foreclosures, auctions, etc.

You can probably call a lawyer's offices and get the name.

There may also be some information available in or around the register of deeds office or whatever the Canadian equivilant is.

I don't know how they are handled in Canada but in New York the taxing entity must publish in the newspaper when and how they are disposing of properties acquired for tax delinquency. Different counties have different procedures, some sell at auction others by sealed bid.

thanks guys

Alan,

If it's an auction for property tax liens, a lot of the county court houses here will also post all that information on their web sites.

As others have said, how it works up there may be totally different.

Each state in the u.s is totally different.

Since you are in Canade you need to go to your local taxing authority and they usually have a booklet for people that want to invest in tax auctions.

this is a good way to buy a house isnt it?

Funny you ask about this. I was thinking of this a few weeks back. I opened up my local newspaper and noticed that the tax lien properties stated that they could be sold for the amount of the back payments and fees to the first person that comes up with that amount. Some of these properties were only at $8,000! Does this mean that this property can technically be sold for this amount to the first person with the money in their hand? I tried to get a better understanding of it and that is what it sounded like to me. If so, INVESTOR HEAVEN!

A lien is just that a lien.Most states homeowners have redemption periods built in.

Here is how it works in a nutshell counties and cities have to provide services to the public fireman,police,water department,schools etc.

If they did not immediately collect this money they would be in serious trouble.So they sell the lien to an investor and give the homeowner a certain amount of time to make up the back taxes plus penalties and interest.In my area it is a year.So if the lien is 2,000 and I pay the county 2,000 I now own the lien.Say the interest is 10 percent now before the years time is up the homeowner has to bring 2,200 to the county and they will not accept partial payments or the payment without the penalties,once the lien is paid by the homeowner in the redemption period the investor brings the lien back to the county and the county gives the investor back the 2,000 plus the 200 penalty and interest.

If the homeowner did not pay the lien within the redemption period you could foreclose.

Property taxes are always superior to other leins even the first mortgage.

Why then in there right mind would a bank not catch up the property taxes for the homeowner to avoid putting there position at risk?

It's simple sometimes the taxes are not escrowed in the loan,the county mails out a notice but the bank never recieves it or it goes to the wrong department,by the time the left hand knows what the right is doing you the investor have foreclosed and now own the property.

I have a friend who did this and they got a 150,000 property for 4k.He then called up the bank and informed them he now owned the property and they could buy it back from him,he sold it to them fast and made a quick 60k.

Each state is different on the bidding process,the interest rates paid out,and the redemption period.

There are many pitfalls to tax liens just like buying foreclosures.The question you have to ask yourself is do I want to tie up 3k for a year to make 300.00 bucks or can I use that 3k in a year's time to make way more money?

Most of the tax liens are just like foreclosures the homeowners waits until days before the redemption expires to pay the back taxes off.Every once in awhile you get lucky.If you have a bunch of money it sure beats out what the banks are paying for a solid return on your investment.

A book you could read at barnes and noble is "make money in real estate tax liens" by Chantel Carey and Bill Carey.It list state by state processes for the u.s..

well the reason I asked is because my parents bought a house this way. Except it was in a little lakeside village and they caught it before the village repo'd it.
They found out it was going to be repo'd, they tracked the guy down and offered to pay the back taxes and give him $1000 cash in hand. The guy took the deal, plus he owned the house outright. So my parents ended up getting a 70s style split enty on your average sized, serviced, city lot for $9500.
I asked the question here because in the village my parents bought in, every government office is all rolled up into one building and one person type situation (theres 500 houses, 350 people, and one store). I am in a bigger place and dont know what department/office to go to and get the information.

We buy a lot of property at tax sales.

In California you can find these tax defaulted properties, and the minimum bids required for purchase on the websites of the County Assessor's offices. Most of the California counties have online auctions through bidforassets.com. A couple have live, in person auctions. You are far more likely to get a good deal at an in-person auction, as it drastically reduces the bidding pool.

Most of the houses for sale in California are junk. I wouldn't let my dogs pee in the yards of the houses. Typically if there is a mortgage owed the bank will pay the taxes to keep the property from being seized (it takes 5 years of unpaid property taxes in California for the the home to be seized). So most of the homes I've come accross are either illegal structures built without permits, or really old, really run down, really scary places that have been in a family for generations. We buy mostly land at the sales.

You have to be careful though and ask yourself why people stopped paying taxes. There was a 10 acre parcel that we were thinking of buying, but then we started thinking why someone would let it go for $980 in back taxes. After some digging around and asking neighboring land owners it turned out that the property was an old "asbestos field". I don't even know what that is, but I'm glad I didn't buy it! The City of Coalinga ended up purchasing it, I'm guessing they were the only bidder.

so a hypothetical situation:
A guy has a $100K property with a remaining mortgage amount of $50k. He doesnt pay his taxes and the house gets repo'd by the city and put up for auction and someone buys it for $10k.
What happens to the mortgaged amount on that property? Is it now some other type of debt the origional owner is stuck with?
Im unclear on that part.

With property tax situations, you need to know what your actually getting. In some you do get the deed... but in many cases you are only getting a lien and will be paid back what you paid plus the interest rate you bid. In these cases, several years have to pass before you can foreclose the lien to actually get control of the property. These often differ by county in the US and may vary in a similar way in Canada.

Just know what your getting and perform a due diligance check before you get too far.

It varies by states.

In California and Nevada you get the actual property, not a lien. I believe what Realty Check is referring to is called a "tax certificate sale".

Alan, in the situation you described, the mortgage is wiped out and the bank loses the property, so the new owner would own it free and clear. That is why banks always request to be notified when property taxes have not been paid. We have never set up an impound account when purchasing a house, and one year we were a month late paying our property taxes (completely our fault, we went on a month long vacation and forgot to mail the bill on the way to the airport, it sat in our car the whole time we were gone). With our next mortgage statement we received a note that said that they had been notified that the assessors office did not receive our property tax bill and that the bank would be paying it and adding it to our next motgage payment.

I have yet to see a property go up for auction in California or Nevada that has a mortgage owed on it. But again, it differs by area.

I am in Nevada and I was reading the published info in the newspaper about these tax liens. It clearly states that the first person to pay the lien, gets the deed to the property. This is why I can't understand why the banks in 2nd position to the IRS wouldn't just pay it off to save from foreclosure. If I buy the lien for $10,000 and the redemption period is 2 years, then can I turn and sell the property before this time period is up or do I have to hold it until the redemption period is over? What good would the property be to me if I can't do anything with it for 2 years?

You would not have clear title for 2 years, and could possibly have no claim if paid off, and the "market value" would reflect that. Now worth much.... However ways around this problem do exist.

Here in California, and in Nevada, you have a clear, insurable title after one year.

We have bought many properties at tax sales.