Tuesday, February 27, 2007

Tips for Bidding at a Tax Sale

Here are some tips from the Tax Lien Lady to help you increase your chances of being a successful bidder at a tax lien or tax deed auction.

Be one of the first to register for the sale and among the first to arrive at the sale. At very large tax sales it’s not easy for the tax collector to see the bidders in the back of the room. More bids are awarded to the buyers that are in front of the tax collector (or who ever is doing the auction). At some sales seating is assigned based on your bidder number, so register early for the sale. If seats aren't assigned, be sure that you arrive at the sale early so that you get a good seat. I like to get to a tax sale one hour before the sale begins, that way I know that I can get a good seat.

Make sure that you turn your cell phone off before the start of the sale. Every thing happens very fast once the sale begins and if you have to stop paying attention to what is going on in order to shut your phone off during the sale, you can easily loose tract of what property is being bid. Also do not talk to anyone while the sale is going on for the same reason. At one sale that I went to, someone came in late and sat down behind me and asked me what property they were on. Because I allowed myself to be distracted and answer his question, I missed the opportunity to bid on a property. Once the sale starts, you’ll have to pay strict attention and avoid distractions.

Know what your bottom line is on each property before you go to the sale. Have a spreadsheet with the maximum amount that you are willing to pay, or the lowest interest that you are willing to pay for each property, or have these numbers written on the tax sale list next to each property. You can easily loose tract of the auction if you have to figure out what you want to pay while the bidding is going on. Also keep a running total of what you are spending so that you don’t go over the total amount you can pay. If you do bid over the funds that you have available and you can’t pay for all of the liens or deeds that you were successful bidding on, you could be barred from attending any more tax sales in that county. It’s a good idea to take a calculator with you to the sale to help you keep tract of what you’re spending. Don’t forget to add in any other costs that you might have to pay at the sale; like recording fees, realty transfer fees, or auctioneer’s fees.

You also might want to have a highlighter and a pen with you. The highlighter is to highlight the properties that you want to bid on. The pen is for crossing out the properties that were paid before the sale and for changing the amounts on the properties where partial payments were made. This is another reason why you want to get to sale an hour early, you’ll need to get the final list and make all of these changes before the sale.

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