Tax liens are for sale, but finding cash is harder.
Tax Lien Lady’s Report: Tax Deed Sales in PA
I just got back from Thailand last week where I made history as the first woman to be head coach for a USA Weightlifting men’s team! I went to Thailand to coach the men’s team for the First Youth World Championship. But I missed the Monroe county Judicial tax sale, which took place on May 20th.
I did send my husband, Bill to cover the tax sale for me and find out how many properties sold and what they sold for. I wanted to see just what the trend was this year and I wanted to be able to pass that information along to you.
Here’s the information that he brought back to me from the sale.
First of all out of the 403 properties that were on the list, only 52 were taken off the list before the sale because they paid, went into bankruptcy, or were postponed. Out of the properties that were left a very large percentage did not sell at the sale. Only 100 properties sold. The most that was paid for a property was $160,000, but many properties were sold for the minimum bid.
Only a handful of properties sold for over $10,000.
It seems that though the sale was well attended, there were fewer properties sold this year and for lower amounts. There are a couple of factors that contributed to the outcome of this year’s judicial tax sale in Monroe County. Many investors that were heavily invested in real estate are now cash poor.
When you purchase property at a tax sale in Pennsylvania, you need to pay in certified funds on the day of the sale. In Monroe County you’re given one hour to pay for the properties that you bid on in certified funds. If you do not pay in the time allowed the property is re-bid and you are barred from participating in future sales – this is not a good thing and is to be avoided!
It is not as easy to borrow money as it was even a year ago, and many investors are sitting on property that they cannot sell in this market and they cannot get their cash out.
Another reason that many properties did not sell in this year’s tax sale is that people are being more cautious on their spending, especially on raw land.
- It is not easy to sell real estate right now and you generally cannot make money on land until you sell it.
- Builders are having a hard time in today’s real estate market, so they are not buying land.
- On the contrary, many of them are selling off the empty lots that they own in an effort to raise cash.
I did not investigate all of the land that was for sale in this auction, though I did look at a couple of building lots that were in the sale. The lots that I looked at were in a development in a municipality close to where I live. The problem with these lots is that they are in a mountainous area near a ski slope. A couple of the lots I looked at looked like they would be good building lots, but a couple were on severe grades that you could not build on without spending some significant money on excavation.
None of the lots that I looked at sold at the tax sale.
I think it’s good that bidders are being more cautious when it comes to spending money on raw land. Remember that when you purchase property at a tax sale, your purchase is none refundable and you still have to record the deed and pay realty transfer fees (these fees are added at the time of the sale). And you have to clear the title to the property before you can sell it. All in all, there will be more available on the repository list this year, when it’s available sometime after July 1st.
Maybe this year, unlike the past few years, there will actually be something good left over.
About the Author: Joanne Musa, the “Tax Lien Lady” has helped investors all over the world to build a profitable tax lien or tax deed portfolio fast. Get your free Tax Lien Report now at 7 Steps To Building Your Profitable Tax Lien Portfolio.