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Saturday, May 16, 2009

Buying real estate at back tax sales.



My surgery was rescheduled to the 20th of May.
So now I have 3 day to get my garden in and complete all the things I need done before then. As I will have a number of restrictions after it happens. May 20 is also My youngest daughters 27th birthday.

Yesterday I managed to get out the 90 day notice letters to the people I know are involved with the farm I and trying to get from last years back tax sale. There is allot more involved to buying a property like this. It is more than winning the bid.

You have to do a title search.
And notify any person who holds a publicly recorded deed of trust, mortgage, lease, lien or claim upon that real estate of the latter person's right to redeem such person's publicly recorded security or claim. Notice shall be sent by certified mail to any such person, including one who was the publicly recorded owner of the property sold at the delinquent land tax auction previous to such sale, at such person's last known available address. Failure of the purchaser to comply with this provision shall result in such purchaser's loss of all interest in the real estate.
As long as no one with on interest in the property. buys out all the money you paid plus interest on tax. Or the current owner only has to pay the back tax and penalty plus interest. Once the purchaser has notified the county collector by affidavit that proper notice has been given, anyone with a publicly recorded deed of trust, mortgage, lease, lien or claim upon the property shall have ninety days to redeem said property or be forever barred from redeeming said property.
Look at Missouri law link RSM140.405 for more information

Missouri Collector's Deed for Taxes
Deed to purchaser if unredeemed.

140.420. If no person shall redeem the lands sold for taxes within one year from the sale, at the expiration thereof, and on production of certificate of purchase, the collector of the county in which the sale of such lands took place shall execute to the purchaser, his heirs or assigns, in the name of the state, a conveyance of the real estate so sold, which shall vest in the grantee an absolute estate in fee simple, subject, however, to all claims thereon for unpaid taxes except such unpaid taxes existing at time of the purchase of said lands and the lien for which taxes was inferior to the lien for taxes for which said tract or lot of land was sold.

link (RSMo 1939 § 11149, A.L. 2003 S.B. 295)


With this form of title it still don't give you full rights to your property. You have to go to court and get a quiet title.
For me it would fall under tax taking issues, where a municipality claims title in lieu of back taxes owed (or a subsequent purchaser of land at a tax sale files action to gain insurable title.
With out this action you can not get a loan, build or sell the property.
Quiet title actions do not “clear title” completely.
A quiet title action is also subject in many geographic jurisdictions, to a Statute of Limitations. This limitations of action is often 10 or 20 years

With the property I bought it already has legal issues to ownership. The person#1 who occupied the property. has been bard from living there but with his possessions are still there. He has a suit against the person#2 who sold it to the current owner #3. His claim is the title to transfer to person #2 was not signed by him. As the notary made the mistake of not including his name as he was in front of her to sign his right away. So that is his loop hole to fight for ownership. And he is a squatter at this time. The 3rd owner has been barred from stepping foot on the property too. As he did not get a clear title to the place. So he has legal ownership to a place he can not touch. Till owner #2 removes #1.

For me this is not a problem other than #1 may personally do illegal things to the property. Or cause harm. He is a known person of criminal action regarding drugs.

As long as I do every thing correct and by the law I have full rights to occupy the property the day I receive the title.

Conclusion Buying property at back tax sales is not a get rich quick thing like people who want you to buy there information from. It is mostly and investment where you hope the person pays there tax. So you make a bit of interest money. And if you do this in volume. you need more money than the bid amount. Because if you plan to buy and resale it is not a quick turn on the property.
You may ask is it all worth it?

For me it is Yes. I do not plan to resale, build or get a loan on it.. So I do not need a quiet title. I can wait the 10-20 years. for a clear title.


Up date
we did not get the property and lost money.
The cost of title search . Legal fee, and certified letters was almost $300.00 we received About $146.00 in interest. So this was a loss of money.


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7 comments:

Betsy from Tennessee said...

Hi Grammy, Good luck getting the farm. There's always so much 'red tape'.... GADS!!!!!

Good Luck with your surgery also. Keep us posted.

Lots of love and prayers.
Hugs,
Betsy

Gail said...

Looks like you can pay the taxes just by salvaging all those vehicles!

Good luck, I know this is your dream. It shall happen.

Zaroga said...

My oh my... I got lost trying to read that!

Good luck with your surgery and you will be in my prayers.

Denise said...

Praying for your surgery.

mrsb said...

Good luck with the farm, and with the surgery! You'll be in my thoughts and prayers!

George said...

This makes buying through a real estate agent seem like a piece of cake!

Wendy said...

My goodness, is that ever complicated!!! Good luck. I hope it all works out for you.

Tomorrow is your surgery. I will keep you in my prayers and hold you in my heart. Hope everything goes well and you will be back home with your family in good health!