Does this sound familiar?
I just submitted a sealed bid on a tax sale property, and I think I bid too much. Is it too late to back out?
Sounds similar to buyer's remorse. Here's the scoop when bidding on a property being sold by public tender for tax arrears (i.e., municipal property taxes, interest, penalties, and other reasonable costs incurred by the city):
- Contact the City. Theoretically, you should be able to withdraw your tender (e.g., by written request) any time prior to the closing date/time for receiving tenders.
- The City reserves the right to cancel a sale up until a tax deed is registered.
- If your tender is rejected, the City will either send back your bid documents and deposit, or provide you with the necessary information for other arrangements.
- If you are the successful bidder, you have 14 days to close. If you fail to close, your deposit is forfeit.
- If the successful bidder fails to complete the sale and you're the second highest bidder, you are then given 14 days to close. And if you also fail to close, your deposit is forfeit.
That said, remember, "Nothing ventured, nothing gained." To avoid an expensive learning lesson, do your due diligence.
- By its very nature, a tax sale property is a problem property. You can't include conditions on your tender, i.e., subject to financing, insurance, inspection, etc.
- The "assessed value" is not the same as its "market value". Use conservative estimates, and budget for overruns. If this is an investment, treat it like one. You're in business to make money.
- Consult a lawyer. Chances are you won't receive a survey, nor be able to tour the property, get vacant possession, or even obtain a key. Know the risks. Know your rights.