Ontario Tax Sale Property Forum
Tax Sale Forum => General => Topic started by: Sasha on November 22, 2008, 04:50:01 PM
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I subscribe to ontariotaxsales.ca and receive winning bid information for their 'featured' properties. Why are people bidding more than assessment value on tax sale properties during a downturn in the realestate market?
I'm very cautious, you know, once bitten, twice shy sort of thing, though I've made mistakes, lost $50,000 in mutual funds before putting everything in bonds and won't buy again till the market show some sort of improvement (this was money toward my retirement so there is still time to recover, hopefully in a year or two).
For example, the property 'close to' Lake Bernard (walking distance to lake but not on lake) was assessed at $7,100 and the winning bid was $7,200. Property in Greater Napanee, vacant lot, near a lake and zoned as shoreline but not on lake, assessed at $9,800 and highest bid $15563.13. The other properties that there were bids on in July, August and September went for less than half of assessed value, which is what I expect. Are these people crazy? They see a small vacant property near but not on a lake and (greater Napanee??) and overbid?
I remember a few years ago (when market was good) seeing properties that were going for 20 to 30% of assessed value, except for those very close to Toronto or large urban centre or in excellent shape. Now there are crazy people bidding, or they know something that we don't know.
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I subscribe to ontariotaxsales.ca and receive winning bid information for their 'featured' properties. Why are people bidding more than assessment value on tax sale properties during a downturn in the realestate market?
I'm very cautious, you know, once bitten, twice shy sort of thing, though I've made mistakes, lost $50,000 in mutual funds before putting everything in bonds and won't buy again till the market show some sort of improvement (this was money toward my retirement so there is still time to recover, hopefully in a year or two).
For example, the property 'close to' Lake Bernard (walking distance to lake but not on lake) was assessed at $7,100 and the winning bid was $7,200. Property in Greater Napanee, vacant lot, near a lake and zoned as shoreline but not on lake, assessed at $9,800 and highest bid $15563.13. The other properties that there were bids on in July, August and September went for less than half of assessed value, which is what I expect. Are these people crazy? They see a small vacant property near but not on a lake and (greater Napanee??) and overbid?
I remember a few years ago (when market was good) seeing properties that were going for 20 to 30% of assessed value, except for those very close to Toronto or large urban centre or in excellent shape. Now there are crazy people bidding, or they know something that we don't know.
Assessed values should be used as a general guide only. There are many properties that are grossly under-assessed. In most cases MPAC errs on the low side to begin with. I have a 12 acre bush that is assessed at $8,000, and I wouldn't let it go for less than $60k (turned down $50k)....prime example. Also, if there is development opportunity (natural severances, etc. )... assessment dosn't take these factors into consideration.
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Also, It could make sense for the neighbour to pay a bit more for the property.
P.S - The Adjala 48.5 Acre property sold for 51,000$ -
David.
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For example, the property 'close to' Lake Bernard (walking distance to lake but not on lake) was assessed at $7,100 and the winning bid was $7,200. Property in Greater Napanee, vacant lot, near a lake and zoned as shoreline but not on lake, assessed at $9,800 and highest bid $15563.13. The other properties that there were bids on in July, August and September went for less than half of assessed value, which is what I expect. Are these people crazy? They see a small vacant property near but not on a lake and (greater Napanee??) and overbid?
I remember a few years ago (when market was good) seeing properties that were going for 20 to 30% of assessed value
I agree that many of the bids are high. Too high. The examples sited I don't think are the best. If you can build on those they are a deal. If you look at Hamilton at 298k, tax sale properties could hit market values. [Maybe this one is higher]
Many of the bids I have been in on, the winning bid has been close to twice the second bid. Very discouraging. Many of them more than assessed value
There was a tax sale for a property in Eastern Ontario. Assessed value was about 160k. Cabin on a lake. To me it looked like mosquito town on a swamp. It sold for 46k I say good luck, On paper it looks like a good deal. I wonder how they came up with that assessed value to begin with.
However I think the sellers market is coming to an end and we may see a swing the other way.
There is a lot of work research and costs to this hobby. What is our mark up to make it worth while if we decide to flip it?.
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What is our mark up to make it worth while if we decide to flip it?.
I personally wont touch it unless I see 100 points , If I cant double my money ( or close to it) it isnt worth the risk. There is one heck of a downside in this game, If you bid close to market, what is the point, Might as well buy MLS or POS
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This is what I said in regards to Napanee lots.
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There is a lot of work research and costs to this hobby. What is our mark up to make it worth while if we decide to flip it?.
I'm glad you used the key word here.. "hobby".
I think if anyone's master plan is to get rich flipping tax sale properties, the only way I can see it happening is if you start early in life and live to be 100.
The large majority of properties on here that aren't redeemed are bush lots that certainly wouldn't turn over on the MLS too quickly, especially last year, this year, or next year.
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I agree that many of the bids are high. Too high. The examples sited I don't think are the best. If you can build on those they are a deal. If you look at Hamilton at 298k, tax sale properties could hit market values Maybe this one is higher.
Gud Luck!!!!!!!!!!
Hey Kristi.amy
That is exactly what I wrote November 23rd five posts earlier?? [except for the Gud Luck] ???