Friday, January 20, 2006

Speculators Bid Up Tax Deeds In Florida

The Palatka Daily News has this report on one Florida countys' tax deed auctions. "It was standing room only at Tuesday’s tax deed auction. Deputy Clerk of Courts Kenny Downs estimated that about 75-85 people bid on tax deeds, some of which went for 10 times their listed price. 'They’ll be bidding right through the roof,' he said."

"Bidders came from all over the state, Downs said, adding that he even recognized one bidder who came all the way from Canada."

"Tax deed auctions haven’t always been so lively. Downs said interest has been picking up in the last 12-18 months. Before that, auctions drew only a handful of local people and deeds usually went to the first bidder who would pay what was asked."

"Tuesday’s auction is another example the fervor and intensity of Putnam County’s red-hot real estate market. Although land prices in Putnam have risen dramatically in recent years, they are still considered a bargain, compared to the rest of the state."

"Larry Pritchett, property appraiser for Putnam County, said his offices are overwhelmed by all the land changing hands, or all the hands coming in to buy up the property. 'Our deed processors are working overtime,' he said."

"Pritchett said thousands of vacant quarter-acre lots in the Interlachen and Georgetown areas that have sold slowly in the past are now demanding $10,000 at tax deed sales. The same property may have sold for $6,000 a year ago."

"As investors and vacationers look for new land to buy, Patrick Kennedy, director of planning and development for Putnam County, said many people are buying land they cannot yet build on, since the comprehensive land use plan may dictate uses other than those requested by landowners. 'I think that’s the issue that our office is going to face,' Kennedy said."


At 12:29 PM, Blogger Ben Jones said...

Obviously, no one should buy into this frenzy. But the story shows a little about how it works and that one pitfall; buying land that can't be developed.

At 1:14 PM, Blogger Chip said...

I suspect one reason tax deeds are selling so well is that the buyers believe there is now a far greater likelihood, than anytime in recent history, that the deeds will be defaulted on by the property "owners." They think they might actually get to buy the house at auction, whereas presumably in the past, any decent property was redeemed at the last minute.

Unless it's illegal, there probably are a lot of operators who buy the tax deeds and then, when the redemption time is about to expire and if the mortgage is low, they go to the owner and offer to give them a couple grand and 10 days to get out.

At 11:21 PM, Blogger Out at the peak said...

The tax deeds in Texas are interesting as they do work differently than other states. If there wasn't so much competition, you could make a killing off of the deeds as you got about 25%+ interest during redemption. If the owner doesn't pay, you can file to take over the property.

There was already too much competition when I looked at doing this in 2004, but at least no one went for the vacant land. Looks like they are doing that now. "Grrreat."


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