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Author Topic: conflicting info??  (Read 22334 times)
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imz
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« on: June 25, 2008, 12:30:40 AM »

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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Pfm1011
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« Reply #1 on: June 25, 2008, 04:19:26 AM »

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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imz
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« Reply #2 on: June 25, 2008, 06:29:29 PM »

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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hhs
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« Reply #3 on: June 25, 2008, 07:20:46 PM »

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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Pfm1011
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« Reply #4 on: June 25, 2008, 07:45:03 PM »

"so you're saying the bank would be in there bidding for the property if there was an outstanding mortgage on it?
--
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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somebodyuknow
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« Reply #5 on: July 01, 2008, 06:00:57 AM »

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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Pfm1011
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« Reply #6 on: July 01, 2008, 08:04:23 AM »

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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Sasha
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« Reply #7 on: July 01, 2008, 09:36:09 AM »

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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Pfm1011
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« Reply #8 on: July 02, 2008, 02:58:23 AM »

" 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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justlooking
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« Reply #9 on: July 03, 2008, 04:44:14 PM »

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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Asindero
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« Reply #10 on: July 03, 2008, 05:50:26 PM »

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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Pfm1011
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« Reply #11 on: July 03, 2008, 06:31:57 PM »

Didnt stay till the end?  How may bids were there?  and why didnt you stay and pick up your deposit?
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justlooking
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« Reply #12 on: July 03, 2008, 06:46:11 PM »

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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Pfm1011
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« Reply #13 on: July 03, 2008, 07:09:45 PM »

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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Sasha
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« Reply #14 on: July 03, 2008, 08:16:04 PM »

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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