Ontario Tax Sale Property Forum
Tax Sale Forum => Questions and Answers => Topic started by: imz on June 25, 2008, 06:30:40 AM
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newbie here......maybe someone can help.
for these tax sale properties, is it possible that there is a standard bank mortgage on the propery and if so, i presume that the mortgage comes with the property?
so if i bid $50,000 and there is a mortgage of 350,000, i assume the mortgage as well for a total cost of $400,000?
i read somewhere that these properties (tax sales) are free and clear of all bank mortgages.
(there may be crown mortgages, but not bank mortgages)
which is it??
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2. how much does a title search and execution search cost? what are searches are necessary for complete due diligence?
thnx
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First any mortgages on the land are void. However a bank wont take a haircut for 350k and they are notified of the sale, they will redeem to recover their asset so the only mortgage holders who get burned are private and even thats rare. The bank is notified one year prior to the sale at the same time the owner is given the notice of sale.
Only "crown interests" remain . Crown interest is any money owed to any government agency. IE Income tax judgements.
You must do title search on property and execution search on owner. If the government has a judgement on the owner, it will stick to the land even if not registered on title. Private judgements do not stick even if they are registered on title.
Title search packages..Cheapest is ontariotaxsales.ca packages run around 100 to 120 to title and execution search. The summary they provide also indicates what will remain and what wont.
Under sheriffs auctions the mortgages remain on title and are assumed.
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TO PFM,
so you're saying the bank would be in there bidding for the property if there was an outstanding mortgage on it?
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follow up question... let's say my search finds no other liens on a property, and the title and execution searches come out clean.
and let's say i get the property for $100K.
What is the worst possible scenario for me at that point?? (aside from the property being a complete toxic dump)
my concern is ending up owing some kind of money somewhere to someone for several hundred thousand or something silly like that.
how many people on these posts have actually bought a property? I hate to sound cynical, but this seems like a procedure where only the lawyers and people doing searches make the real money.
Of the people who bought property, how many bids on average does it take to get 'winning bid'
thanks
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Should I assume this discussion is about the property in Toronto? And the property has a mortgage on it? Good luck, everybody !
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"so you're saying the bank would be in there bidding for the property if there was an outstanding mortgage on it?
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follow up question... let's say my search finds no other liens on a property, and the title and execution searches come out clean.
and let's say i get the property for $100K.
What is the worst possible scenario for me at that point?? (aside from the property being a complete toxic dump)
my concern is ending up owing some kind of money somewhere to someone for several hundred thousand or something silly like that."
The bank would be redeeming, not bidding ..IE Paying the taxes
Simple..No executions and clean title.... Noone can come after you for more money
As per 100k .. Havent seen the place but unless it is radioactive it will go for multiples of that
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Maybe I can save someone the headaches of tying up your money, and the fees associated.....a "flipper" developer I know has already submitted a bid with the first two starting digits of "37" on Allanbrooke, so unless you start with "38" it's not worth tying your cash up. However a search didn't turn up any extra liens, although if the city cuts the grass, there will be that one added.
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I hope you dont expect us to believe someone is bidding 370 and if we arent we should not bid and just move on ....... If you actually knew someone bidding that..we will buy it back at his bankruptcy....
Folks I wouldnt pay too much attention to that post ..
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I tried to do a tile sch but my lawyer require the name of the last owner can any one tell me what to do in that matter, Thank you, 42 Allanbrooke dr,
If you go to the Land Registry office in the district that the property is located, for a few dollars you can do a title search. You will be given a copy and the title search contains the name of the owner. I was told an 'execution' wasn't necessary and all necessary information would be on the title search. The few properties that I've put a bid on (they were sealed bids, not auctions) I've purchased the information from the ontariotaxsales.ca website since they include execution and an easy to read summary. Their website also has quite a bit of information on the tax sale procedure for free. Title and executions searches are for a fee, but you require to be a member and pay a membership fee, they also offer tender packages for a small fee that includes detailed property information (also available through MPAC and directly from the town).
This site (taxsaleproperty.org) is terrific for questions, sharing property information, exchanging ideas and there a couple of very knowledgeable people on this site (Frank, Rob, PFM1011 and Dave seem very experienced and educated on the subject). I was a 'newbie' until 2 years ago and got most of my info. from the two sites that I mentioned and this forum and have only put in bids on 2 properties, one of which was cancelled day of sale and another where I didn't bid high enough. Someone had previously said, if you haven't seen the property, then bid 1/2 of the assessment value, the property that I put a low bid on went for 20K under assessment (87% of assessment) and the previous owner had it listed on MLS and many had seen the property -- nothing wrong with it, required no work and had many 'upgrades'. According to MPAC, tax or distress sales do not affect the value of neighboring properties.
If you want to make money on the property and not have to keep it long term, then bid well under MPAC assessment. The guy that got the property at 87% of assessment is renting it out, if he had tried to sell, after paying the real estate fees, legal fees etc... he wouldn't have made any money.
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" was told an 'execution' wasn't necessary and all necessary information would be on the title search"
You must do the execution search . If the owner owes money to the crown, the property is security even if not registered on the title. IE if the owner is busted for tax evasion , Revenue Canada has interest in the property and could care less if you are a new owner.
Thats the good part about Ontariotaxsales.ca Their report covers all the angles and give a clear summary.
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Who stayed for the duration on the Toronto property. I heard the bid for $297000.00. Do you know what property actually went for??
I did bid but just over 220.
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Who stayed for the duration on the Toronto property. I heard the bid for $297000.00. Do you know what property actually went for??
I did bid but just over 220.
If you put a bid, you will know it by mail. But if you are the second highest bidder, they will hold you check for 15 days.
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Didnt stay till the end? How may bids were there? and why didnt you stay and pick up your deposit?
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Hi: According to the city clerk, deposits were not being returned until next Friday,( the earliest day available for P/U) due to the large amount of paper work required to be completed by the city staff. The council chambers were quite full, must have been more than 100 in attendance, although I didn't count. Some bids did start at $100,000.00 though.
I am anxious to hear what it did go for if anyone knows. I was quite sure that it would cost me around $100,000. in renos from the info I did gather from several sources (including some neighbours) so for me , I could not justify more that low 200's.
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Well you are probably in the right area , The houses at that end of the street are only trading around the 385 to 430 area. Up the street the lots double in size and the prices go up .
Figure 100k to fix , 200 to 220 for the building leaves you some room for profit . Much more then that you are risking little or no profit, so what is the point? You have to watch Toronto sales are down 18 % over last year so you cant bet on a sucker coming and paying thru the nose for a crap reno as listings are up 25% so the buyers have alot of choice.
If you can do alot of the work yourself you can lower the repair costs but you still can burn thru 50 in materials without even trying.Even a simple Ikea kitchen with basic appliances will set you back 15 to 20 by the time you are done.
No one has even gone broke by bidding conservatively, This game is to make money or find a piece for yourself , not win bids at any cost
A deal like this better turn you 100 k clean profit or its not worth looking at.
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I was wrong, I thought for sure the T.O sale would be cancelled didn't bother getting any info. Anyone know what the properties went for and what was the property assessed at (MPAC)?
Sasha
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I'd say your bid was in the right area as well. I was around the same.
Winning bid was 310 followed by 302! about 14 bids in the 200-220 range and a couple stragglers above that.. Whoever bid the 310 is in for a nasty surprise when they realize the extent of the renos required..
Pfm's pretty much on target with the value . Property is among the smaller ones in the area so I figgured the value at 380-390k as well. MPAC was in the 340's..
Minimum of 60k required in renovations, $310k, +time and other costs... Crazy. There was a "whoa" in the room when the council read the bid! hehe
So did anyone know the story behind the property? (aside that it being vacant for the last 10+ years?)
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Yeh! That's Exactly what I was thinking. The guy who bid 297 ?? For himself? I found that last sale similar semi in good shape sold for 380. I cant do work myslef and I'm not a contractor so must stay conservative. Second one I lost out n\on. What's up with the large bids anyway?
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Sasha, the assessed value was 342000. Still waiting to find out what the high bd was for.
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310 with an assessed value of 342 in a market downturn?? Similar thing occurred in the 1990's and lasted a few years, we may see many foreclosures and tax sales if the downturn continues
Guy had to have been a contractor, they're the ones that go for these, doesn't cost them as much to do the reno's. Wouldn't want to be the sucker that buys that house after the reno's, they'll probably scimp on quite a few things if they hope to make a profit.
In my area, been seeing a lot of homes listed by real estate agents at assessed value and a few below assessed value (local economy), starting to see a few T.O homes on MLS listed for not much above assessment (realestate market 'correction' and homes going for less than list price or previous sales). Many homes didn't have an assessment in the past couple of years, MPAC skipped a couple of years, but they'll get assessed soon.
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"Maybe I can save someone the headaches of tying up your money, and the fees associated.....a "flipper" developer I know has already submitted a bid with the first two starting digits of "37" on Allanbrooke, so unless you start with "38" it's not worth tying your cash up. However a search didn't turn up any extra liens, although if the city cuts the grass, there will be that one added.
There is a perfect example of why you take everything you read on here with a grain of salt, Never Forget ....we are all competitors.
Always make your own decisions. Of course that was one of the lamer attempts at scamming I have seen ...slimebag moron
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"Maybe I can save someone the headaches of tying up your money, and the fees associated.....a "flipper" developer I know has already submitted a bid with the first two starting digits of "37" on Allanbrooke, so unless you start with "38" it's not worth tying your cash up. However a search didn't turn up any extra liens, although if the city cuts the grass, there will be that one added.
There is a perfect example of why you take everything you read on here with a grain of salt, Never Forget ....we are all competitors.
Always make your own decisions. Of course that was one of the lamer attempts at scamming I have seen ...slimebag moron
Unbelievably lame..I hope it was from nobodyIKnow
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"Maybe I can save someone the headaches of tying up your money, and the fees associated.....a "flipper" developer I know has already submitted a bid with the first two starting digits of "37" on Allanbrooke, so unless you start with "38" it's not worth tying your cash up. However a search didn't turn up any extra liens, although if the city cuts the grass, there will be that one added.
There is a perfect example of why you take everything you read on here with a grain of salt, Never Forget ....we are all competitors.
Always make your own decisions. Of course that was one of the lamer attempts at scamming I have seen ...slimebag moron
Unbelievably lame..I hope it was from nobodyIKnow
If someone had bid that high, they'd have won for sure. What reason would someone have to get people to bid high? When I said that I bid just above 1/2 of assessed value, unless its in bad shape or in an area with a poor local economy, then I bid just above minimum, just being honest and looked at past winning bids on ontariotaxsales.ca website. Many win with bids just above minimum in areas where people aren't interested in buying.
Perhaps someone we know lives in the area and is thinks a sale at a low price will bring down the value of his property. Don't worry, tax sales, 'distress sales' such as divorce, immediate relocation and sherrif sales etc... have no effect on MPAC assessment. In my town, MPAC gives out a brochure outlining whats used in assessment such as recent sale prices of nearby areas (within a block or two), lot size/type, home size, quality of construction materials, additions, fireplace, pool, basement - finished, depreciation (yes the actual house does depreciate, prefab homes depreciate faster, land values go up and current market trends set values) and the single most important factor is location, location, location etc...
Sasha
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"Maybe I can save someone the headaches of tying up your money, and the fees associated.....a "flipper" developer I know has already submitted a bid with the first two starting digits of "37" on Allanbrooke, so unless you start with "38" it's not worth tying your cash up. However a search didn't turn up any extra liens, although if the city cuts the grass, there will be that one added.
There is a perfect example of why you take everything you read on here with a grain of salt, Never Forget ....we are all competitors.
Always make your own decisions. Of course that was one of the lamer attempts at scamming I have seen ...slimebag moron
Unbelievably lame..I hope it was from nobodyIKnow
I would say his interest was solely to convince others not to bid. His only problem was that the bid he told us about (37) was ridiculous to begin with which showed he obviously didn't know the value of the property enough to realize it himself...
I assume he's probably the guy who bid 52k hoping nobody else would show.
Alternatively he could be the guy that bid 56k, had it rejected for only submitting 10% down and spent the next minute or two in front of council discussing why his bid had been invalidated while knowing full well that he had already been outbid by at lease 50 other people anyway!
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Makes you wonder, doesn't it. Just like the Oshawa sale. That guy's bid was 10 grand over recent sales. I dont get it.
I would have liked that house in the Kingsway though. Oh well! Keep posted for Toronto sale in the fall. (Don,t ask how I know)
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I could not find out the whole story, but did find a good contact and was told vacant for last 15 years. You can see from the title search that the property was inherited, apparently one daughter. I am told that some neighbours had contacted the family trying to purchase but to no avail. Wonder what the state of mind. Its a sorry situation to just let a property go for 49K in taxes when assessed at 342k
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well... i must say.. i initiated this thread more as a general question on the process, (because i'm completely new to this).
Nowhere in my original question did i mention the allanbrooke property, but somehow this became a became a discussion on that property.
having said that, it was the allanbrooke property that i was curious about and wondered if there was a potential for a good deal there.
I was there for the entire time yesterday to see how things would go.
there were 75 bids in total. (about 4-5 were rejected)
Top bids were:
310K
302K
297,450
251K
250K
241K
236,650
hats off to the person who bid 251K. IMHO that was the most intelligent bid and offered the best risk/reward opportunity and should have won the property.
(i did NOT bid by the way)
the top 3 bids are out of whack, again just IMHO. take $300K and add about 70-80 for renos and you can find something comparable on MLS without incurring all that unknown risk.
thanks to the folks who replied to my question...
to the dude who said someone would bid 380K ... stop wasting our time... no one was gonna believe you anyway... and that's just an being a donkey.
these boards are designed for the intelligent exchange of information -- go find yourself a mindless chat room to waste your time with
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The very first tax sale that I obtained information on was in Bradford and the sale was subsequently cancelled. I received a tender package from the city including a survey and information on doing a title search. The person on the telephone at the township offered his opinion, the taxes owed ++ were around 39K, the assessment value of the property was around 150K and the treasurer whom I spoke with told me, if it was him, he'd bid at least 100K. I drove by the property and onto a private driveway, door wide open, windows smashed and junk, old tires, car parts etc... A detached barn with more junk. Both home and barn made of wood siding and rotting. I thought it required to be demolished, land value only, yet the treasurer was advising to bid 100K and the assessment included the house and barn. Is the city supposed to make recommendations on bidding? I followed up since I had spoken to the neighbors, they helped, he got in touch with the guy and he eventually paid his taxes. I was later contacted to see if I was still interested in buying the property, since the owner paid his taxes and just wanted to get rid of it, said he'd sell it for 100K. I no thanked him and told him to ask a contractor that was into TLC (Time, Cost, Labor) type work. I assumed the same thing would occur with the Allanbrooke property, though Allenbrooke is in much better shape, at least from the outside and in a very established neighborhood. If Allanbrooke doesn't require any TLC, but a little cosmetic work, the winner may still make a profit. Who would bid that high unless they had seen the property and knew what shape it was in inside, a neighbor, a foe pretending to be a friend? I can't see myself bidding that high without knowing the condition of the property, its too risky. Any property that I've ever purchased on MLS, has been conditional on inspection and I use that information to negotiate a better price.
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You really have to wonder sometimes. Allenbrook was vacant for at least 10 years and in need of TLC. There was a hole in so no doubt racoons had found their way in. Plumbing, electrical,etc.. lots of work to do...
The story surprised me.
I could not find out the whole story, but did find a good contact and was told vacant for last 15 years. You can see from the title search that the property was inherited, apparently one daughter. I am told that some neighbours had contacted the family trying to purchase but to no avail. Wonder what the state of mind. Its a sorry situation to just let a property go for 49K in taxes when assessed at 342k
I was really interested in the story as well after finding many years of taxes owing, no mortgages or liens. I thought it was a couple that probably went back to Italy years ago. I mean who simply gives a 100% owned house to the city?
Turns out the daughter found out she was adopted, went a little crazy and decided she was no longer family. In essence, she walked away from the house.
I didn't talk to the neighbours, but I do know that nobody could buy from the family -family didn't own the house. This house must have become an urban legend to the whole family... Imagine random people calling you every year inquiring if they can buy a house that you don't own.
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Hey, don't believe everything people tell you. What happens if a sole heir is deceased and there are no children, next of kin, no will? You know, the childless widow that leaves everything to her cats.
No surprise that there was no mortgage, as already mentioned, if there was a mortgage, the bank would have paid the taxes and then sold the home as foreclosure.
A home down the street from me assessed at 87K, bought 6 years ago for 70K (I live in the boonies, on a locum, though have a home in T.O) sold for 50K, it was on the market for 3 years, no one wanted it, basement had flooded, plumbing leaking behind wall and roof leaking, serious damage and mold problems - health hazard in my opinion. I wonder if the property had gone on tax sale and was a closed door, no peeking, tax sale, that it may have gone for more. If the excess proceeds go back to owner, then it may have been worth it for the owner to not pay and let the property go on tax sale.
Anyone take a close look at 73 Allanbrooke listed on MLS at 585K and check what the assessment is for 73 in comparison to mkt. value?
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73 Allanbrooke 1423 M2 huge lot on outside of bend in rd Plus a house LISTED on MLS means it hasnt sold
42 Allanbrooke 271 m2
At 71 Allanbrooke the houses become detached , You cannot compare the two, Its a "wrong side of the tracks" comparison
Compare 50 sold at 419 last August close or 49 at 385 with Nov 07 close so these were last spring and summer sales and Im guessing they didnt come with raccoons
36 Closed in January at 485 but had previously 265 in 2002 so should have been around 400 so looks like a severe overpay or the house was renovated up to Taj Mahal standard which I doubt
Allow toronto market isnt hot anymore and I can only see the buyer will be lucky to get out with a breakeven
The only people I could see spending this is the adjacent owner as they have lived there for 12 years putting up with this Sh*thole and would pay a premium to get it
( if they had planned it out better they could have changed the locks, made necessary repairs to maintain health standards , paid the taxes and prayed the owner didnt show up for a few more years ;D If the daughter story is true, Im guessing she has passed on )
"but your honour, when she stormed out she said "you can have the F*cking place" or alternately "she asked me to take care of it for her, these are just liens for the repairs"
Of course I dont understand why the neighbours didnt at least cut the grass themselves just so they dont have to stare at it as it was dragging their houses down and would take a whole 5 minutes to cut the lawn
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Wow, you did all the research and smart not to listen to 'stories' of what happened.
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Wow, you did all the research and smart not to listen to 'stories' of what happened.
I've said it time and again...do your homework. That is exactly the kind of info. you need before you make any bid. Find out what it is worth on the market, then determine what it might be worth given all of the unknowns...and how equipped you are to remedy problems that might be exposed once you open the doors.
You wouldn't buy a car...or much of anything for that matter...without an opportunity to do a thorough inspection and obtain guarantees as to it's condition. Unfortunately, in this game that is not possible, and you must expect that the reason it is in tax sale is that there are serious problems. There is no way, that these properties should be going for anything more than 60 to 70 percent of market value if they were clean. Yet time and again we are seing properties go for more...go figure. Of course there may be other factors that come into play with these high bids, but I believe that one of them is shear stupidity (I can be pretty blunt at times). 8)
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Come to think of it Frank maybe you are on to something. If I am ever lucky in this game to buy something maybe when it comes time to sell I should call the resale "Tax sale property sale" ( after I have tripled the price)
Of course It may help to get the assistance of the MPAC to raise the assessed value. Anyone ever heard of a case where the MPAC was requested to RAISE the assessed value.
Dave2
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Dave,
Call them and tell them you finished your basement and pay more taxes, and all the reno's you did to make sure the structure value doesn't depreciate. Not telling them and trying to get away with paying lower taxes? Kidding! I'm sure you pay all the necessary taxes and wish to pay other people's taxes.
According to their brochure, you may call them and request a reassessment, but be careful and have good answers if they wish to know why you didn't obtain necessary building permits (your addition) or didn't tell them in the past, and do this just before you're planning to sell. When you sell it for much more than what its assessed since its in a high demand area with very few new homes being built and not many for sale and all comparables selling for more, the new owner will automatically pay much more in taxes.
According to MPAC, their assessment is rarely used when selling or purchasing a home in large urban centres. In small towns, they are fairly accurate, although they are a generally a few years behind, not many accurate comparables in terms of past sales in small towns. There is a 'cabin' on a lake near my home (10 min. away) with an assessment value of $1, honest, looked it up. It was vacant, uncleared without a road leading to it that someone had kept for several years, until a year ago, now there is a gravel road, the land is cleared and someone built a nice cedar cabin and there is a gentle slope to the water and 200ft. lake frontage, no deck yet, owner wants 129K, but there's no bathroom in it and I'm not into going to an outdoor 'privy'. I'm sure its worth more than a dollar though. They'll know when it sells and they find out there is a solid structure cabin on it, its cleared and there is now a gravel road to the property, got the roll# from the real estate agent and looked it up, according to MPAC its vacant land. What the new owner pays for it will determine the value and being cedar in an area with plenty of lakes and vacant land (though much of it is crown land) it could actually depreciate unless land values increase in area since cedar will require exterior work eventually and on going interior reno's to prevent depreciation. The area is not a 'hot real estate market', people moving out of area instead of in. I've seen the opposite too, a home not well taken care of selling for much less than MPAC assessment, no one seems to know what market value is in this area, no two homes are the same and maybe one or two homes sell in a year.
In the past with real estate agents I've used MPAC and MLS, I've requested the real estate agent to provide me with info. on past sales in area. Where would I get that info without a real estate agent?
Sasha
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" I've requested the real estate agent to provide me with info. on past sales in area. Where would I get that info without a real estate agent?"
Unfortunately it costs 2.5 K a year for the teranet software , so you are stuck with the realtors , who I can assure you will NOT give you real numbers. Im not sure if your area is covered as the whole province isnt in the database yet
Standard bs from realtors is " they were asking around 3 hundred, I think it went for around asking" Meanwhile they are fully aware it was asking 275 and went for 230 or less ...Well I guess 220 is AROUND 300 ( Very large around)
Realtors have very selective memory and are very effective at the use of " Im not sure but I think" or " If I recall correctly" and very good at the use of "around" They also are very very good at ignoring requests for neighbourhood sales reports. If you look at a house ask for the neighbourhood sales report, If they dont get it for you, get another agent.
I personally only deal with the listing agent as on several deals I have had them cut their commission to make a deal go. One agent in the deal and the house can sell for half and they end up with the same coin in their pocket. These scum are shocked when you tell them to cut the commission in half when they bring you a sign back.
Never did understand people who find a house on MLS and then call their own agent to show it to them. You find it and they want 2.5% of the deal for simply calling the listing agent for you.? Never sign a exclusive with an agent.
If you want real entertainment , Read the Toronto Real Estate board and Lepage press releases, worst mutilation of/selective statistics I have ever seen. Someone should sue those clowns
90% of the realtors I have met are absolute scum who will say and do anything to get "their money out of your pocket". Its too bad because there is a few who actually are honest but they are few and far between.
I never let them know I have teranet and ask standard questions . I just watch these scum BS like crazy.
(morning rant)
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PFM : Just curious. How did you get Teranet?
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Anyone can get it, Its just paying the piper to a tune of 2800 a year, I got it a few years ago for some commercial work and It is the best money I ever spent, Mind you not alot of people are going to spent that much or use it enough to justify the cost
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Hi, there,
Thanks for posting the high bids. I was there too. There was this grown man kept talking on the phone while the bids were being announced. It distracted other's attention. I wish the city staff would said something to him. Anyways, I agree that the bids in Toronto are too high.
Take care! :)
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PFM1011,
Are you a residential and/or commercial real estate agent. I know you're a retired pilot, but you don't seem like the type of person that would be satisfied with a pension and just diddling around the house during your retirement. Is real estate your retirement career?
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Real estate agent!!!! Hey there is no reason to start insulting me ;D
.. .Actually I run a business that is totally non related to this or the airlines , actually do this for "fun" as I get to play land speculator without the big dollar stress and risk of commercial real estate. (which is a suicide investment route right now as it has nowhere to go but down ) Also enjoy the detective work involved in this.
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Last June this house sold for 310 in the auctions and we said they were insane ( which I still think they absolutely were)
Sold in march this year for 450, I have no Idea how much they stuck into but it looks like they got out alive and probably with some beer money
If John and Dorothy are on here , please let us know the real numbers of what it cost to do this up