Last month I discussed a “Tax Sale.” Basically, if property taxes are not paid by the property owner, investors pay these taxes and get a tax lien certificate on the property. When/if these taxes are eventually paid by the property owner or mortgage company, the investor receives the amount of taxes and 14% interest back.
On March 6, my husband and I ventured to the Otoe County Courthouse to view the tax sale because we were both very interested to see how this worked. Every county in Nebraska has this sale on the first Monday of March each year. Over 40 people registered prior to the day. Many of these people worked in groups for large investors in order to get as many tax sale certificates as possible for that investment firm.
Prior to the sale, everyone congregated in the hallway of the courthouse. About 8:55 the Otoe County Treasurer Nicki Baker had everyone line up to draw a number. We then went to the courtroom and people sat in the chair that had their number.
A list of properties up for the tax sale was nine pages long and can be found HERE. The treasurer started with the property with the highest taxes that were not paid and asked the person in position one if they wanted to buy or pass. If they bought it, she would move onto the next property and ask the person in position two if they wanted to buy or pass. If they passed, the next person was asked if they wanted to buy or pass. And the sale continued like this.
Prior to the sale, people review the final list for the tax sale to determine if a property is one they want to buy or pass. You don’t get to choose which property you want. It’s really all up to luck with the properties you get the option to buy or pass.
Most of the initial properties were bought right away because they were higher in taxes owed and they fit the business matrix that the investors were looking for. Yes, some properties were completely passed up. The county takes the certificate for all properties that remain unsold.
We did not stay until the end of the sale. We watched for about ½ hour. I’m assuming it lasted another hour or two. Very interesting and could possibly be a good investment, but would take some time to decide which properties fit our stipulations. If you are interested, I highly recommend you go to one first to see how it works!!!
For more information about tax sale certificates in Nebraska CLICK HERE.