How to Buy Adjudicated Property?
Buying an adjudicated property can seem daunting, but it doesn’t have to be. Anyone can purchase an adjudicated property with the correct information and guidance.
This article will discuss everything you need to know about buying adjudicated property.
What is Adjudicated Property?
Adjudicated property is a property the government has seized due to unpaid property taxes.
When property owners fail to pay their property taxes for a certain period, the government can place a lien on the property.
If the property owner still does not pay the taxes, the government can seize the property and sell it at a tax sale.
Why Invest in Adjudicated Property?
Adjudicated property can be an excellent investment opportunity for those purchasing real estate at a discounted price.
Since the government wants to recoup the unpaid taxes, properties can often be purchased for much less than their market value.
Additionally, since most people are unfamiliar with buying adjudicated property, there is often less competition at tax sales.
How to Find Adjudicated Property
There are several ways to find an adjudicated property. The most common methods include checking with your local government, attending tax sales, and hiring a real estate agent.
Check with the Local Government
Most local governments maintain a list of adjudicated properties that are available for purchase. These lists are often available online or at your local courthouse.
Attend Tax Sales
Tax sales are public auctions that the government holds to sell adjudicated properties.
These sales are typically held once or twice a year and are advertised in local newspapers and online.
Hire a Real Estate Agent
Real estate agents who specialize in adjudicated property can be a valuable resource. They can help you navigate the legal and financial aspects of buying adjudicated property and often provide a list of available properties.
Research the Property
Before purchasing an adjudicated property, it is essential to research the property thoroughly. This includes checking for liens and encumbrances, reviewing the property’s title, and doing a physical inspection.
Check for Liens and Encumbrances
Liens and encumbrances are legal claims against the property. These claims can include unpaid taxes, mortgages, and judgments.
It is essential to check for any liens or encumbrances on the property before purchasing it, as they can affect your ability to sell or use the property.
Review the Property’s Title
Reviewing the property’s title is another crucial step in the research process. This will ensure that the property is free of legal claims or disputes.
Attend the Tax Sale
Attending the tax sale is the next step in purchasing an adjudicated property.
At the sale, you will have the opportunity to bid on the property. It is essential to set a budget for yourself and stick to it.
Remember, the goal is to purchase the property at a discounted price, so don’t get caught up in bidding wars.
Pay for the Property
You must pay for the property once you have successfully bid on it. This typically involves paying the total purchase price and outstanding taxes and fees.
Having the funds available to pay for the property is essential, as failure can result in legal action.
Procedures for Sale of Adjudicated Property
Here are the general guidelines for selling adjudicated property:
- The property becomes adjudicated to a parish or municipality due to unpaid property taxes. The owner essentially loses ownership.
- The parish or municipality must reasonably identify and notify the former owner and any other interested parties of the adjudication and their right to redeem the property. This is typically done via certified mail.
- If the property is not redeemed within the redemption period (often three years from the adjudication date), the parish or municipality can sell the adjudicated property.
- Upon approval and completion of the sale, the parish or municipality executes an act of sale to transfer ownership to the purchaser. The purchaser then receives a clear title to the property.
- The proceeds from the sale are used to pay any outstanding taxes, fees, and costs related to the adjudicated property. Any remaining funds are then distributed to other taxing authorities (e.g., school boards) based on their pro rata share of the original tax bill.
The parish or municipality must establish procedures for selling the property. This typically includes:
- Setting a minimum bid or reserve price for the property
- Advertising and listing the property for sale, often through public auctions, requests for proposals, or sealed bids
- Evaluating and selecting the winning bid that meets the procedures and minimum bid requirements
- When a buyer is selected, the sale must be approved by the parish or municipal governing authority (e.g., parish or city council).
FAQ
What is the difference between adjudicated property and foreclosed property?
Adjudicated property is a property the government has seized due to unpaid property taxes.
A foreclosed property is a property a lender has seized due to a defaulted mortgage.
Can you get a mortgage on an adjudicated property?
Getting a mortgage on an adjudicated property is possible, but it cannot be easy.
Most lenders require a clear title before approving a mortgage, and adjudicated properties often have liens and encumbrances.
How long does it take to clear a title on an adjudicated property?
Clearing a title on an adjudicated property can take anywhere from a few weeks to several months, depending on the complexity of the property’s title.
Working with a knowledgeable real estate attorney must ensure the title is cleared correctly.
What happens if the property owner pays their taxes after the property has been adjudicated?
If the property owner pays their taxes after the property has been adjudicated, they may be able to reclaim their property.
This process can be complex, and the property may have already been sold at a tax sale.
Are there any risks associated with buying an adjudicated property?
Yes, there are risks associated with buying adjudicated property.
The property may have liens or encumbrances that you are unaware of, or there may be physical issues with the property that were not disclosed.
It is essential to do your due diligence and work with professionals who are knowledgeable about the process.
How to Buy Abandoned Property in Arkansas?
Conclusion
Buying an adjudicated property can be a great investment opportunity for those purchasing real estate at a discounted price.
However, it is essential to do your research and understand the legal and financial aspects of the process.
Following the steps outlined in this article, you can purchase an adjudicated property and start building your real estate portfolio.