Why do tax lien /tax deed purchasers have such a bad
reputation?
reputation?
Every ecology needs it's bottom feeders.
Like all scavengers, they clear debris so everyday life can continue.
Doug Gale is fundamentally correct to bemoan their image as villains
and the truth is most cultures have only a begrudging respect for the
'sanitary worker.'
So why, in the last few years of my most intense interest in tax deed
buying I've only heard terms like 'despicable', 'loathsome', 'crooks',
'vile' and (most often) "people who take advantage of the misfortunes
of others" applied to them? There had to be someone with a good
word for them - besides themselves - or there had to be another,
additional explanation besides the envy of someone getting something
for essentially nothing.
The answer isn't in what they do, but the mechanics of how it is done...
The core problem is - if you are a tax lien/deed purchaser - how do you
know what the lien to a piece of property you've just bought is really
worth? Especially when it has been purchased at a large discount that
implies little value to begin with? How can you do this for a property
that you aren't familiar with? Or at a great distance?
The answer is too obvious: you skip the expensive - in all ways
-jhuuuattempt to gather the knowledge and expertise to do the
evaluation yourself, and simply go to the market. Put a given property
on the market, and respond to the market's feedback. You may not get
the best price, but it'll be in the right ballpark.
Simple, honest, straightforward, anyone can do it. Probably the core
message from tax lien/deed promoters, from John Beck's late night TV
ads http://www.johnbeck.tv/index.htm), Benjamin Bergin's "Deeds 4
Profits"
(http://www.deeds4profits.com/L/17/?sub=1&PRT=&REFPRT=) to
Bryan Rundell's aptly named "Rogue Investor"
(http://www.rogueinvestor.com/government_tax_sales_book.html)
(A web search for "tax deeds," "tax liens" brings up many more.)
Sequence and timing in the process is what makes the
villain:
First, you purchase the tax deed,
Second, you acquire clear title,
Then, AND ONLY THEN, can you put it on the market.
If there is going to be a dispute between the original owner and the tax
lien/deed purchaser, it occurs at the second stage of the process.
The form and duration of the dispute resolution really doesn't matter:
The objective of the former owner is to reach an equitable mutual
settlement (ideally) that will allow the original owner to keep their home,
BUT THE ONLY REAL INTEREST OF THE TAX DEED PURCHASER IS
TO EVICT/DISPOSSESS THE OCCUPANTS FROM THEIR PROPERTY
SO THE SINGLE MECHANISM THE TAX DEED PURCHASERS HAVE
TO EVALUATE IT - PUTTING IT ON THE MARKET - CAN COME INTO
PLAY.
It doesn't matter what value the property ultimately has for the tax deed
buyer - they win some, they lose some - the original owner, even if they
had had the means to settle and re-acquire the property, have been,
AND MUST BE, put through the misery of dispossession and their lives
uprooted, JUST so the property can be put on the market.
Even if they, the original owners, then manage, somehow, to buy it
back....
NOW the reputation makes sense....
(Since there continue to be attempts to securitize tax lien/deed
obligations, this evaluation process is even more insidious.
With securitization, large corporations would be doing even more of
the tax lien/deed purchasing than is the case now, whitewashing them
as "bonds" and selling same to an unsuspecting public or other
faceless, unresponsive investment institutions.
The fate of the tax defaulter caught in that mill would be inevitably grim.)
After all, just seems like good, clean, profitable fun:
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"Just because something is
legal, doesn't mean it's
right..."
legal, doesn't mean it's
right..."
