Housing News

Buying a home at tax sale may not be such a deal

(Housing News) It has become a popular notion that a home bought at a tax sale is a steal, but it is not so black and white – let’s dig deeper into the advantages and disadvantages.

Published

4 years ago

April 2, 2014

Melissa Zavala

money cash

The Property Sold at Tax Sale

If you have ever been channel surfing at 3:00 a.m., then you may have seen a commercial or an infomercial about buying home for as little as one thousand dollars. Perhaps you thought to yourself: where are these deals and how come I’ve never seen them in my own neighborhood?

Read also: Agents, short sale sellers, beware of deficiency balances

These amazing deals that you hear about on television advertisements are tax sales. That is, when a homeowner defaults on his or her property taxes and after many warnings to the homeowner and the mortgage lender, the government has the right to sell the property at a tax sale for the amount owed on the taxes.

What You Really Need to Know About Tax Sales

Perhaps you’ve heard that you can make a killing buying tax sale properties. That may be true, but you need to understand the risks involved in such an endeavor.

Sales Don’t Happen Daily. Generally tax sales occur once a year and the prospective properties for sale will be listed on a government website.
Right of Recision or Redemption. Despite all the warnings that the homeowner has received about a pending tax sale, most states provide a grace period after the sale in which the homeowner can get current on their payments. So even if you purchased the property at a tax sale, the previous owner still may have a redemption or recision period.
Tax Lien vs. Tax Deed Sale. Each state has different laws regarding the timing of these sales and the sale may be a tax lien sale or a tax deed sale. Before you make a bid, understand the difference between the two. In a tax deed sale, the investor buyer purchases the deed. In a tax lien sale, the investor purchases the lien and often tries to collect from the previous owner, who wants to remain in the property.
Mortgages. If the previous owner had a mortgage on the property, investor buyers must investigate this mortgage. While it may be wiped out by a tax sale, will the mortgagee be claiming that the tax collector didn’t alert them to the sale? Might there be some issue with the mortgages that will cloud the title?

Even though I’ve seen lots of infomercials about the benefits of investing in tax sales, I’m not sure that those advertisements mention that you cannot buy a home at tax sale and turn around and sell it tomorrow for a large profit. As with anything, there are serious risks involved in this investment. If you plan to invest a few grand in a property sold at tax sale, seek legal counsel so that you fully understand the risks versus the rewards.

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Related Topics:foreclosures tax deeds tax sales

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Melissa Zavala

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

Published

3 years ago

May 29, 2015

Lani Rosales

Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

Published

4 years ago

March 2, 2015

Dawn Brotherton

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

Published

4 years ago

February 25, 2015

Lani Rosales

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.