The DC government’s Office of Tax and Revenue (OTR) has announced its annual tax sale, an auction of tax liens on over 5,000 residential and commercial properties in the District that have unpaid property taxes from 2008. The auction will be held for three days — Sept. 9-11 — from 8:30 a.m. to noon and from 1p.m. to 4 p.m. each day.
It is important to note that the properties are not being auctioned, but rather the city’s property tax liens against the properties. It’s a little complicated but the gist of it is: If you are the winning bidder for one of the property tax liens, you may have the opportunity to foreclose on the property in question because of the unpaid taxes. However, the current delinquent owner still has an opportunity to pay those outstanding taxes, in which case you don’t get the property. If the owner never pays what is due, you can foreclose and win title — though you’ll have to pay down the overdue property tax first.
According to a recent post on In Shaw, the latter situation is rare:
If you’re interested in the tax lien sale, go for the interest rates, not for the properties. I’ve heard that most property owners pay the taxes.
Bidding at the auction is probably not for the novice, but presumably there is an opportunity for more sophisticated real estate investors.
OTR will hold four free seminars on August 19 and 20 to explain the process.
For more details on the seminars and the tax sale itself, take a look at this announcement. You can also see the list of all 5,000+ properties here. (And if you happen to see your name and property on that list, you’ll probably want to read this ASAP.)
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