Other unknown costs

[avoidconfusion]

I am new at this so are there other cost aside from your winning bid amount that may have to be paid by you on these properties?
Is there a chance that a contractor might come after you for unpaid bills by the former owner or a mortgage company would want the mortgage payments? If anyone can let me know it would be appreciated.

[JulyB]

On top of your amount tendered, you have to pay the accumulated taxes (the taxes accumulated from the first day the property was advertised for tax sale until the day that you pay the balance of the amount tendered), the land transfer tax (see table below) and the GST (for commercial properties, you can exempt it, or claim it back, if you are a GST registrant).

For the construction lien, mortgage and/or crown lien, they have to register them so that you can check it out from the title search.  You should do one before submitting the tender (to see if the land is worth for your tender amount) and a second one in the morning of the tender opening day (to see if there is any new lien registered so that you may withdraw your tender).

Land Transfer Tax For Residential Properties
0.5% on the first $55,000
plus 1.0% of the amount from $55,001 to $250,000
plus 1.5% of the amount in excess of $250,001 to $400,000
plus 2.0% of the amount in excess of $400,000

Land Transfer Tax For Commercial Properties
0.5% on the first $55,000
plus 1.0% of the amount from $55,001 to $250,000
plus 1.5% of the amount in excess of $250,001

[Woody]

I am new at this so are there other cost aside from your winning bid amount that may have to be paid by you on these properties?
Is there a chance that a contractor might come after you for unpaid bills by the former owner or a mortgage company would want the mortgage payments? If anyone can let me know it would be appreciated.

I am new to this as well, from this discussion board I have learned of the following costs:

1.  Title search:  Cheap way, do it yourself at the registry office (requires the understanding of some legal terms, play dumb and ask or bring some reference material).  Moderately cheap way, ask at the registry office desk if there are any free-lance searchers in the office that may be able to help you, again play dumb and try to learn as much as you can about how to search.  Expensive way, hire a real estate lawyer.  Beware, sometimes you get what you pay for.  Also use this to evaluate any rights of way, or easements that may change the value of the property.  Note: seems reasonable that you should do this research last as it costs money, most advise visiting said property first to be sure you want to put money out. 

2.  Execution search:  At sheriff's office against current owner.  Here you are looking for crown liens.  These are the only liens/mortgages etc. that really matter, the tax sales act gives you a clear title from all other types of liens/mortgages.  For more info read the other posts on this board.

3.  As previously mentioned, land transfer tax, and accumulated land taxes since sale posting, and of course GST were applicable (don't you love the government).

4.  Gas/Transportation cost:  If you are going to spend thousands of dollars, it would be advisable to look over the property with your own eyes.

5.  Tender package.  Some are free, others cost a few dollars.

6.  Your time.

I may have missed some, but you can never do too much research, read through the postings on this board, and you should be able to learn all you need.

[avoidconfusion]

This is good information thanks!

[Woody]

I just thougt of another one.

If someone is renting the property, leagal fees may be incured to evict.

[RichD]

There's always the possibility of damage caused to the property after you've seen it. Does any one know if you can insure a house before you have physical possession of it? My worry is that I'm the winning tender and there's a time gap there from when I've paid to when I take possession??

[JulyB]

I don't think there is any property insurance you can buy before the possession as legally you are not the owner yet.  That's why in the standard Agreement of Purchase and Sale used by agents, there is an insurance clause to ask the current owner to have an insurance policy in place while the new owner should be responsible for a new insurance policy on the closing date.

Moreover, if there is a fire on that property before closing and the property is burnt out, then the buyer has an option to back out or to receive the proceed of insurance.

The best we can do is to 'inspect' the property at the latest time and pay the money ASAP if you are the winner.  Hopefully the property is vacant, otherwise you will be facing other headaches such as eviction and vandalism.

[RichD]

Ya thats pretty much what I was thinking Roll the dice andhope for the best...Thanks