Foreclosed tax lien properties, if not sold immediately, often go into rapid
decline, trapped between the pull of the main lien purchaser's office for a high
sale price, and the tug of the local real estate agent(s) who know the property's
true value and know it is not worth their time or money to care for.
Once a lien holder has gotten control of a property, in most cases - especially
when a large institutional investor is involved - there will be no one on the
ground to be held accountable and motivated to care for the property.
Usually, the only responsible local party will be a Realtor whose care for the
property won't go much beyond preventing casual vandalizing. The Realtor isn't
in a position to invest in the upkeep of the property. They are able accurately
appraise it's market value, which is typically low. They will not profit much off the
sale and they treat the property accordingly.
In the main office, the lien buyers will be reluctant to give up their most
optimistic appraisal of the property, holding out for a high sale price that simply
doesn't materialize.
In the mean time, the local agents have no reason not to strip the property of all
valuables short of what would truly make it unsaleable. There is nothing, as a
practical matter, that would hold them accountable to the lien buyers at the main
office. The building becomes a shell and even less likely to attract the main
office's asking price.
This starts a downward spiral that doesn't stop until the property's value is so
eroded that the local agents give up trying to sell it. The main office may now
send a trusted agent out to inspect the property, after which they will finally have
to accept that they will never get their desired asking price for it.
The property will then be carried for a while, the lien buyers paying the minimum
on current taxes and maintenance. Eventually it will be clear that the property is
'non-performing.' At that point it is either dumped on the market at a deep
discount or, if it fails to sell, simply abandoned, becoming the problem of the
local municipality or eventually going back up for sale for unpaid taxes.
This has been the consistent experience of cities that have entered into bulk
sale arrangements of their tax lien liabilities. Years later they realize that they
have lost control of individual properties or, for all practical purposes, entire
neighborhoods, creating festering pockets of properties no one will, or
sometimes, is able to take responsibility for. Trying to get back control over
neglected properties becomes an additional burden to the taxing authority, a
hidden cost not often taken into account when making tax collection policy
decisions.
decline, trapped between the pull of the main lien purchaser's office for a high
sale price, and the tug of the local real estate agent(s) who know the property's
true value and know it is not worth their time or money to care for.
Once a lien holder has gotten control of a property, in most cases - especially
when a large institutional investor is involved - there will be no one on the
ground to be held accountable and motivated to care for the property.
Usually, the only responsible local party will be a Realtor whose care for the
property won't go much beyond preventing casual vandalizing. The Realtor isn't
in a position to invest in the upkeep of the property. They are able accurately
appraise it's market value, which is typically low. They will not profit much off the
sale and they treat the property accordingly.
In the main office, the lien buyers will be reluctant to give up their most
optimistic appraisal of the property, holding out for a high sale price that simply
doesn't materialize.
In the mean time, the local agents have no reason not to strip the property of all
valuables short of what would truly make it unsaleable. There is nothing, as a
practical matter, that would hold them accountable to the lien buyers at the main
office. The building becomes a shell and even less likely to attract the main
office's asking price.
This starts a downward spiral that doesn't stop until the property's value is so
eroded that the local agents give up trying to sell it. The main office may now
send a trusted agent out to inspect the property, after which they will finally have
to accept that they will never get their desired asking price for it.
The property will then be carried for a while, the lien buyers paying the minimum
on current taxes and maintenance. Eventually it will be clear that the property is
'non-performing.' At that point it is either dumped on the market at a deep
discount or, if it fails to sell, simply abandoned, becoming the problem of the
local municipality or eventually going back up for sale for unpaid taxes.
This has been the consistent experience of cities that have entered into bulk
sale arrangements of their tax lien liabilities. Years later they realize that they
have lost control of individual properties or, for all practical purposes, entire
neighborhoods, creating festering pockets of properties no one will, or
sometimes, is able to take responsibility for. Trying to get back control over
neglected properties becomes an additional burden to the taxing authority, a
hidden cost not often taken into account when making tax collection policy
decisions.
-link to derelict properties
-link to reverted pages
-link to reverted pages
This page is incomplete and still
being worked on...
being worked on...
Last revised 01-26-2012
All blue highlighted text links to
additional notes and information
All blue highlighted text links to
additional notes and information
"Just because something is legal,
doesn't mean it's right..."
doesn't mean it's right..."
Here is why...