Tax Sale properties

[dreamoutloud]

Hey, I am looking at trying to purchase a piece of property on the upcoming tax sale. I have no experience with this and in my research have found that later down the road if I ever wish to resell this property it is nearly impossible to obtain a clear title which would make resale extremely difficult.
Does anyone have any experience with this?
I truly appreciate any help or ideas that you could offer.
Mahalo in advance!
Laura

Its a colorful life!

[Kapoho Joe]

With respect to each parcel of property, WARNING IS HEREBY GIVEN to the persons assessed and to all persons having or claiming to have any mortgage or other lien thereon or any legal or equitable right, title, or other interest therein, that unless the taxes due thereon, with all interest, penalties, costs, expenses, and charges accrued to the date of payment are paid before the time of sale appointed above, the property will be sold as advertised. ALL OF THE PROPERTIES ARE OFFERED "AS IS" AND WITHOUT ANY WARRANTIES AS TO TITLE OR PHYSICAL CONDITION.

The taxpayer may redeem the property sold by payment to the purchaser at the sale, within one (1) year from the date of the sale
of the amount paid by the purchaser, together with all costs and expenses which the purchaser was required to pay, including the fee for recording the deed, and in addition thereto, interest on such amount at the rate of twelve percent (12%) a year.

[PaulW]

I looked into this once. It's all just a waste of time. Don't bother!

[kalakoa]

I actually went to the auction once. Properties I was most interested in were paid up at the very last minute and marked off the inventory. In one case, owner (or someone) paid off the back taxes on the middle lot of a triple side-by-side, making the listing far less compelling.

It could also be said that you're helping force people out of their homes, assuming they were living there and had to leave. Maybe you even have to evict them. Just seems like a bad scene all around, even if it is an American Tradition to force people off their land, and you have this piece of paper saying it's okay, etc.

[HereOnThePrimalEdge]

Here are a few things I've noticed when watching the tax sale properties:

* As the listings are updated (maybe weekly?) a fair number are removed from the list each time (10-20%?) As kalakoa noted, it can happen even the day of the sale.
* Prices vary, but the sales prices seem to be in the range of about 2/3rds the price you would pay for a similar property sold through a realtor.
* You can't do anything with the property for a year, as the original owner is legally entitled to buy it back from you for a period of 12 months (see Kapoho Joe's post for details)
* I'm not sure if there is any way to determine if there are liens on the property in advance of the sale (anyone know?). Usually that's done at closing, not before. If there are liens, it could make the final cost of the property more than it's worth.

If you want to combine the dual pleasures of insanity and social acceptance, religion is your only choice. - Last Aphorisms

[Tink]

I have always been skeptical in buying property through tax auction sales as the reasons stated above. Add in the faction the lot may be in a flood zone, be unbuildable due to lava tube, sinkhole, etc. and also may be next to a "dog kennel" or rooster farm.
Property is still reasonable even with the pending septic ruling for one to build on, or invest in an existing home to make a decent profit if buying on spec.
Take time, and do your own due diligence.

Edited for mis-types as original done on cellphone.

Community begins with Aloha

[SoCal_to_Hawaii]

I've been watching the tax sales for a couple of years.
a) You are not prohibited from selling in the first year, but it is not advisable. Nor is making any improvements. The option for the original owner to buy it back transfers with the sale. If they do exercise the option they have to pay the sale price + 12% interest + anything else the new owner paid (ie: back road fees).
b) Having poured over the lists of sale properties, most are vacant land. It is not likely you are kicking anyone out of their home. (Illegal dwellings and squatters aside.)
c) To Tink's comment - treat it as you would any other property; check the neighborhood and walk the lot. For the upcoming sale I went through the list and eliminated most of the list based on area. That left only 9 I might be interested in. Those I looked up on the county's site and eliminated another (corner lot). Then my husband and I drove by all of the lots - what are the neighbors like, are there huge albezias? This eliminated another 4. For the remaining 4 we went to the County office to look at the title reports. (I should note here that we went through the same process for the last sale and did see an IRS lein on a property, but KJoe's comment should be heeded - they make no guarantees). I think two this go round had notes that the OA had officially filed for back fees. As to be expected - you would stop paying the OA before you stopped paying your taxes. The remaining 4 that we may be interested in -- they will be walked. ALWAYS walk a lot.

[Mimosa]

If the owner is local or Hawaiian or has a Hawaii address you do not want the property .
If it is a vacant lot - check to see if all fee's are paid and no liens .
In a few years when the economy here tanks - what seems like a bargain now will be an over priced property then .
Always walk the entire lot - if it is in a flood zone or a swamp or has lava tubes on it - you do not want it .
If the area is a druggy area or high crime area - check with law enforcement 1st to see history of reported crimes in the area for the prior 3 years . Make sure no rooster farms or piggeries or illegal grows on your ideal lot or the value is half of what you may think is a good deal.
The tax auction in our perspective is a rip off and you will be kicking some one off their land .
Make sure the lot is not in probate .
We have attended several of these auctions over the years and have not ever invested in some one else s hardship .
Mrs.Mimosa

[leilanidude]

they will be walked. ALWAYS walk a lot.
-----------
So you are trespassing...Sure would hate to come across the owner while out walking a lot.

[loffelkopffl]

look at property first
find out what it's worth
don't overbid
you get a clean tax deed title
the last owner can reclaim within one year but you get your bid price plus 12% interest
after one year no problems in selling