Tax Sale Guide Home
On Bidding
Chapter: OTHER TAX SALE PROPERTY SALES
swanr
You need to find the lowest amount which will make you the highest bid. the municpal goverment is not required to get fair market value. It is only obligated to accept the highest bid. in fact the difference between the minimun tender amount and the amount of the winning bid goes to the Public Guardian {or equivalent.}Â
Also don't forget that it takes at least 12 months for when the cancellation price or min. tender is set until the tender date . so you will end up paying another year or two or three of taxes, then land tranfer tax, GST unless the land has been sold once before as residence, any crown leins and an admin fee for getting and filing the tax to you. All things you need to factor into your tender.Â
Speedfreeksteve
Check out the properties you are interested in personally no matter what. After awhile you'll notice properties that you love just from the description but when you see them you'll realize it wasn't what you expected. Likewise, I've seen properties that sounded pretty undesirable in the description but actually discovered in person that they had things to offer that were not in the description (good right-of-way, spectacular view, etc)
Frank
I own a piece of land in Temagami which I believe someone has a mining claim to, but not the surface rights, since those are mine. My deed clearly states that I do not own the subsurface and therefore I presume that someone could set-up a mine nearby and bore underneath my turf. A couple of year's back some surveyor's came through and put mining claim stakes on my parcel, but my understanding is that they would have bore under me - or buy me out if my property is the preferred site for the shaft.
BuyerBeware
I've looked for a post that I read a little while ago, but can't find it to reply. So I'll put it here. Before I found this awesome site we bought property (77acres) up near Englehart from (if i can say it here) Weurch.com. It was suppose to have all surface, timber and mineral rights. It is a mining claim. Mining clams go way back, some into the 1800's. After the Lawyer did the searches it was found that mineral was not owned by us if we purchased it.The original owner lossed the rights because of not paying TAXES. Now to the point, if there was valuable minerals found we could not keep or do what we wanted with them. They would give us a percentage.
Stillsleepy
I've tracked town answers to a lot of my questions, and I've inserted them into my original post (below) in RED
So as you may have seen in the new members/introductions forum, I'm very green and have a lot to learn. As a result I've got a million questions and will probably post them in this thread... Perhaps in the future it will become a go-to source of information for new members.
For the time being, I've got a question about liens.
I've done some research and as I understand it, a lien is basically a "claim" on the value of an object. The circumstances I'm questioning are property, of course, so banks and other lenders claiming monetary values against the houses/properties for whatever value they're owed.
My questions are this:
- I understand that a title search is the way to check for liens against a property (correct?) in addition to other information. My questions relating to this are: Can this be done with only the address and related info, or do you need the "technical" information? (i.e. lot number, PIN number, and all that other gibberish) Just as well, can it be done with only the technical info and not the postal/street address?
A Title search can be done with the technical information, OR the street address. Catch is, you may have to do (pay) for other searches to get the rest of the information to then conduct the title search.
- Is it possible that a lien wouldn't show up on a title search, or be added between the search and the final sale process? If so, is there any insurance against this? Should you just wait as long as possible to check for liens? Should you check them again the day of or day before buying/bidding?
Yes, it is possible for a lien to be added any time before the property has been transferred. It is advisable to wairt till the last day to conduct a title search, or better to conduct a title search and then a follow up search. It is also advisable to also conduct an execution search against the owner, as they may have liens against them.
- Are lawyers the only ones who can do title searches? Would city hall be able to give me (or anyone) lien information? Basically, is there any alternative (READ: CHEAPER) way of checking for liens? Assuming of course that you have the address or other necessary info.
Anyone can conduct a title search and/or an execution search. This is typically done through the local offices for the jurisdiction, but these days can be done online (for Ontario) through the "Teranet" public-private partnership.. Or something.
- Are the results of a title search usually in "layman's" English, or are they in technical/law terms?
Technical terms, unfortunately. Though if you get a lawyer to do the search they may translate it for you
- Would the results of a title search (or whatever the correct method is) show the current lien against a house? Or would it only show the initial value, and then the interest rate and other info needed to calculate what the current debt is?
Still not sure about this one.. I suspect it's initial value only.
PG
I was naive with my first and recent tax sale purchase. As a lawyer, I diligently read through all of the posts on this site and on other Ontario tax sale sites regarding paying for tax sale properties.
I explained to a major bank that I was intending on bidding on a property and that I would need to close the deal in 14 days or would forfeit my downpayment. The bank agreed that it would bank roll me for the transaction.
I won the bid of $227,000 and submitted my deposit of $45,000 which had been drawn from a personal line of credit.
The day after winning the bid, I returned to the bank to arrange for the financing of the remaining $182,000.
After explaining to the bank in detail that this was no ordinary real estate transaction, the bank could not wrap their heads around the transaction.
Seven days passed from the date of the sale before the municipality informed me what the total balance would be on the property taking into account the taxes that had accrued since the tax sale and the land transfer tax.
With only seven days to pay the full amount, the bank was scrambling to finance the deal. I reminded the Bank that I was required to finalize the deal within 14 days of the date of the sale even though the municipality had only given me 7 days notice of the final amount payable.
On the 13th day, the bank sent me and the municipality's lawyer an email stating that it required more time to finalize the financing and that it couldn't forward me the money in the allotted 14 days.
Although the municipality's lawyer was empathetic to my situation, the fact was that there were 40 other people waiting in line for me to default on payment so they could have a kick at the property.
With 24 hours to either pay $182,000 or lose $45,000, I maxed out every line of credit and credit card that I had and begged and pleaded with several family members to bank roll me for the remaining balance. On the 14th day at the 11th hour I paid the full balance to the municipality.
It then took a full month for the ministry to transfer the title into my name, all of which time I was paying huge interest on my maxed out credit cards.
Finally after title transferred, I went to the bank with clear title, MPAC's assessment on the property and the value of current houses on Realtor.ca and convinced the bank to give me a line of credit for the full purchase price of the property since the purchase price was equal to 65% of the assessed value.
This was a good lesson learned, but could have ended disastrously. The lesson that I learned, which other members have point out, is that if you can't pay cash for a property within 14 days of the sale, you can't afford to buy it.