Buying tax defaulted real estate can be a blessing or it can be a curse. You can get a great deal but you must do your research.
The first step in the due diligence process is to get the list of parcel numbers from the county. This list can be extremely confusing at first.
Once you get the list, then you go to where the county records are kept, usually called the County Auditor or County Assessor. Many counties have this information online. If not, then you will need to go there in person. Alternately, you can hire a title company to do this research for you.
The next thing you should do is get a plat map and visit the property. Take your digital camera and lots of notes. If you are attending a big sale, all the different properties can get jumbled in your head quickly, so organization is key.
Once you look up the parcel numbers and have visited the property, then you need to know what is actually on the property. Is there a house there? If so, is it condemned? Is it zoned commercial? If so, you may need to check for contamination issues? Is it vacant land? If so, you need to check whether there is a road going to it.
The next thing you need to check is valuation. As the old saying in real estate goes, it’s all about location, location, location. Check around. Call the Realtors and appraisers and don’t be afraid to dig. Realtors can be extremely helpful if you ask them nicely.
The next thing you need to check is zoning. You would hate to find out that you are about to build your dream house on this property only to find out that it’s zoned for mobile homes.
You also need to find out about assessments. While there are several different types of assessments that can come up, the most common ones are sewer assessments and property owner association assessments. The big thing with assessments is you need to find out if there are any delinquent assessments owed that will be wiped out with the tax sale.
Check with the county first about this and then check with the company assessing the property. In many states, they leave it to the company assessing the property to waive back dues on a case by case basis.
Don’t be afraid to talk to the property association and tell them that you are going to be providing dues to the community and then negotiate negotiate negotiate. They know that you are going to bring in much needed funds to the community and will work with you if necessary.
In conclusion, be smart, be diligent, and be careful. But with the proper planning, great deals are yours for the taking.
By Martin Fisher