Government, Investing, Taxes 
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Anne Arundel County Tax Lien Auction

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Originally published on June 8th, 2005.

While I wasn’t able to go to the tax lien sale this past Tuesday [June 7th, 2005], one of Blueprint’s readers, Khyron, was able to go. Khyron has graciously given me privilege of reprinting his email to me after he returned from the trip and I think you all will find it to be an interesting read. My interpretation of his gut feeling is that it’s not “easy money” as some may be led to believe and that the folks there, while they are out to make money, aren’t entirely heartless and out for the bottom dollar. I suppose that would make Khyron our first “reporter.” :)


Yeah, I guess it is any old auction. But the prices are pretty steep for regular folks. Most of the liens seemed to be going for 70-80% of assessed value, but a fair number went for 100+%. I’m going to sit down with a friend of mine who used to work in real estate and discuss the intricacies before consulting with a lawyer she knows. I want to make sure I understand everything that happened.

If the bid is under the assessed value, the winning bidder need only pay the tax and fees in order to secure the lien. If it’s over the assessed value, the winner needs to also pay a bid premium of a certain percentage of the assessed value. I bet a careful look at the auction results will show that premium properties are probably the 100% culprits.

Also, it is definitely a very very good idea to talk to a lawyer or at least someone experienced in the intricacies of real estate law. You could stumble into huge problems if you try to invest in tax liens without fully understanding the law surrounding them.

I arrived around 10:30 am. The hard part was finding parking. There were a lot of people there. The county council chamber where the auction was held was standing room only, but they broadcast the audio into the lobby. Picked up a packet from the registration table since I didn’t want to bid, just watch. It contained some legal info, the list of properties (about 800, I think) and a registration form. They were in the range of 100-130 when I arrived. I left around 190-200.

I believe most of that information in the packet simply mirrors the information available online.

There were tons of pros there. They usually came in groups of 2, with their lists marked to identify the properties they were going for. Definitely need to prepare in advance.

The lesson to be taken from this is that it is not easy money… doing the legwork is key to making money and protecting yourself from bidding on a improperly assessed worthless piece of land.

One thing I noticed and they spoke about in the info packet was that people would be there to “clear title”. I think I saw one case of this with a woman who was there bidding on her great aunt’s home. They say that if you’re doing such a thing, you just stand up before the bidding starts and announce it, so that everyone knows (and presumably no one bids against you, since you’re doing it for sentimental reasons). She bid and one on just the taxes as opposed to bidding up to the standard 70-80% bid rates. After she got it, everyone clapped, which was cool.

This is definitely a nice heart-warming anecdote but since the lien could’ve been cleared at whatever the tax, fees and minor bit of interest was (which is exactly what the winning bidder would’ve paid anyway), it’s not as significant as it appears on the surface. But still, it’s the thought that counts.

It was pretty interesting. Gonna see if I can check out MoCo’s [Montgomery County] auction next week, I think.

If anyone else has had experiences at tax lien auctions and would like to share, please leave a comment or contact me.

{ 8 comments, please add your thoughts now! }

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8 Responses to “Anne Arundel County Tax Lien Auction”

  1. FMF says:

    Good stuff!!! I’ll continue reading as more “reporters” give their experiences. ;-)

  2. Carolyn says:

    Khyron,
    Thanks for your report. Very useful.
    Sincerely,
    Carolyn

  3. Illusion-of-the-Mind says:

    If you think the county tax sales are crowded….don’t even think about Baltimore City……They use the Convention Center and only the die-hard or tenacious will wait that long.

    Have you ever gone to an auction in the pouring rain or ice/snow…..you get good deals!!

  4. Khyron says:

    Thanks for reading. Working on some new ideas for the tax sales, but I won’t really be able to put them into use until later this year. And I’m still waiting for the market to fall apart. But I have some upcoming trips that could help point out some opportunities.

  5. franklyn says:

    I have gaine some helpful hints on my tax liens. I am really interested in it and Baltimore county specifically. If anyone has more helpful hints, i would be glad to hear them.

  6. Keith says:

    I’ve never ecnouraged tax lien in my entire real estate business career.

  7. MARIE SMITH says:

    Hi,

    I’m interested in purchasing tax liens, however I am having a hard time finding anyone who has done this. Is there anyone who wouldn’t mind a tag-along. I would be willing to assist this person with doing research.

  8. Ned Carey says:

    Many people mis-understand the “clear the title” issue. It is meant NOT simply to clear the title of the lien. It is meant to clear up bad title.

    The title of a property can get screwed up for a variety of reasons. If you buy the lien, you can foreclose on your own property and you will have clear title after the foreclosure.


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