Biding process

[dhill]

Hi,

I have a question about the bidding process. How often do the properties sell far above the min tender.  In other words, what are the chances of getting a property at min tender.  I guess it would depend on how many bidders were interested.  Before I bid on a property, I should get the tittle search done for about $90.00, right?  The problem with the auction process is that you never know if you are the winning bid. You could spend hundreds of dollars on tittle searches trying to win the tender, but lose every time.  Does anyone have any ideas???

Thanks
Don

[Rob]

Hi Don,

More than half of the properties don't even sell at the min. bid.  These tend to be vacant land for the most part.

Perhaps a different approach is in order.  First determine what type of property you wish to buy.  If these are at the low end of the scale 2,000-16,000 you could skip the title search and try for the min.  amount.  If you win the property than you could do the title search and if you notice a problem you could remove the bid you offered and hand over the 20% you needed to put down.  That would cost you $400 (for a $2000.00 dollar property) or $3200.00 (for a $16000.00 dollar property). 

It would be a gamble and it is costly if you notice something wrong with the property afterwards.  But it may be worth it on the lower end of the scale as these properties tend to be vacant land or land without road access.  I wouldn't recommend this approach on a higher end property because you might lose your shirt. 

If you can, visit the property.  Never blindly bid or you might end up with a postal stamp to build on.

[Frank]

Interesting suggestion Rob, but I wouldn't go there - a search doesn't cost that much, provided you know what you are doing and do it yourself. 

What costs a lot is 'checking things out' - I always find that several trips to the location are required, for site visits, exploration of market value, and property search.  Problem is, if the property is worth anything, nine times out of ten it gets redeemed at the last minute and you have wasted your time and money.  Further, even when it is not cancelled you are still in a competetive situation and you can bid on a thousand properties and never get a single one (I've had occasion to bid on properties and the winning bids come in higher than the market value of the property).   Net result is that you can spend a lot of money and time and get nowhere, I think a lot of people do it for the thrill of the hunt - if you win, it is a bonus (it is a definite adrenaline rush).

Don, if you are interested in Rob's suggestion try this weeks listings in the Town of Kapuskasing, most of the lots are going for minimum bids of $2,000 or less, notice however, that they are mostly unserviced and/or unserviceable (interpreted as useless).

Sale of Lands for Tax Arrears
by Public Tender
Ventes de terrains par appel d’offres
pour arriéré d’impôt
Municipal Act, 2001
SALE OF LAND BY PUBLIC TENDER
TOWN OF KAPUSKASING
TAKE NOTICE that tenders are invited for the purchase of the land(s)
described below and will be received until 3:00 p.m. local time on Friday
May 5, 2006 at the Kapuskasing Civic Centre, 88 Riverside Drive,
Kapuskasing, Ontario P5N 1B3.
Description of Lands:
2006-01: 44 Riverside Drive
Minimum Tender Amount: $92,192.45
2006-02: 13 Cain Avenue
Minimum Tender Amount: $19,431.13
2006-03: Con 12, Part lot 18, Parcel 9543 CC
Minimum Tender Amount: $8,653.03
2006-04: Con 6, East Part lot 20, Parcel 2215 CC (50.0 acres)
Minimum Tender Amount: $2,017.29
2006-05: 30 Macdonald Street (2 lots - unserviced)
Minimum Tender Amount: $2,382.86
2006-06: 35 Macdonald Street (unserviceable)
Minimum Tender Amount: $1,191.43
2006-07: 37 Macdonald Street (unserviceable)
Minimum Tender Amount: $1,191.43
2006-08: 39 Macdonald Street (unserviceable)
Minimum Tender Amount: $1,191.43
2006-09: 41 Macdonald Street (unserviceable)
Minimum Tender Amount: $1,191.43
2006-10: 43 Macdonald Street (unserviceable)
Minimum Tender Amount: $1,191.43
2006-11: 2 Laurier Crescent (2 lots - unserviced)
Minimum Tender Amount: $2,382.86
2006-12: 1 Tupper Avenue (unserviceable)
Minimum Tender Amount: $1,191.43
2006-13: 3 Tupper Avenue (unserviceable)
Minimum Tender Amount: $1,191.43
2006-14: 5 Tupper Avenue (unserviceable)
Minimum Tender Amount: $1,191.43
2006-15: 7 Tupper Avenue (unserviceable)
Minimum Tender Amount: $1,191.43
2006-16: 4 Etienne Street (serviced lot)
Minimum Tender Amount: $8,593.36
2006-17: 34 Richmond Avenue (unserviceable)
Minimum Tender Amount: $1,191.43
2006-18: 33 Richmond Avenue (2 lots - unserviced)
Minimum Tender Amount: $2,382.86
2006-19: 38 unserviceable lots located on MacDonald Street,
Tupper Avenue and Richmond Avenue
Minimum Tender Amount: $45,274.34
Tenders must be submitted in the prescribed form and must be
accompanied by a deposit in the form of a money order or of a bank
draft or cheque certified by a bank or trust corporation payable to the
municipality and representing at least 20 per cent of the tender amount.
Except as follows, the municipality makes no representation regarding the
title to or any other matters relating to the land to be sold. Responsibility
for ascertaining these matters rests with the potential purchasers.
This sale is governed by the Municipal Act, 2001 and the Municipal Tax
Sales Act. The successful purchaser will be required to pay the amount
tendered plus accumulated taxes and the relevant land transfer tax.
The municipality has no obligation to provide vacant possession to the
successful purchaser.
For further information regarding this sale and a copy of the prescribed
form of tender contact:
DANIEL GRZELA, Tax Collector
The Corporation of the Town of Kapuskasing
88 Riverside Drive
KAPUSKASING, Ontario P5N 1B3
Telephone: 705-335-2341
Fax: 705-337-1741
(139-P099) www.kapuskasing.ca

[Rob]

I agree Frank, it is not a good long term strategy.  So people reading this thread should take caution with this approach.  But if you are just starting off a 1,750 dollar investment would let you experience the process, get your own property in the province and at worst a nice place to camp (remember to check building permit status with the city).  Just remember to check road or water access unless you fly. 

[Frank]

Excellent point.  I met up with a fellow at the Gravenhurst sale last fall, and he had just won the bid on a piece that I wasn't even considering.  He was pleased as punch as he had just purchased his own personal river-front camp-site for a few thousand.  The property is subject to flooding and is water access only (marina a short distance away), but that was exactly what he was looking for as a summer retreat. 

Life's like a box of chocolates.