Hey everyone,
I found a home in my area that is listed through the mls. Great area ok house, a little overpriced but. when I was checking into it, I found out that it is estate owned, the trustee is out of state, and acording to county records there is a tax lien on the prop. any adice on this one? should I just offer a lowball offer, or what about buying the tax lien, it’s only 1000. how do tax liens work? I guess it’s not a direct question but any info would be great
John
Howdy John:
Just offer what will work for you. I just offered $26K on a property that had a $36K 1st lien and they accepted in a few days. After further study I told them that I could not do the deal and offered $19K. They may take it and I do not care one way or the other.
Tax liens have to be sold at auction or in our state the actual property is sold but with redemption rights. You can not simply pay the taxes and get the lien.
Sounds like you may have a motivated seller and they may just want to dump the property. I try to feel out the seller before making an offer. You may ask the agent questions first to see how motivated they may be. Knowing how long on the market is one good indication that they may take a lot less than the asking price.
I echo what Tedjr said. A low ball offer is to offer an arbitrary amount. All offers are calculated. They have no bearing on the asking price. You figure out how much you have to get the property for in order to make you money. If it is to buy fix up and sell, the offer is the amount left over after you calculate how much it costs to fix it up, carry it until sold and your profit subtracted from the retail selling price. These are fixed numbers and will dictate the most you can buy the property for. Anything less and you are buying the property for charity. If you are going to buy the property fix it up and rent it, you have to offer the amount that will allow for your spread of rent over expenses while holding and managing the property to fit your profit goal ($200/month).