Due Diligence

“Due diligence” is a well-known term in the real estate field which loosely means…’do your homework’ before making a purchasing decision. In the case of tax foreclosed properties, there are several things you should do before bidding at the auction:

Step 1 – Research Liens:

Visit the County Clerk’s office and make a list of liens against the property. You will have to look them up by the former owner’s last name.

If you cannot do this yourself, you might want to consider hiring a ‘Title Abstractor’ to assist you.

Check for IRS liens: These are the only valid liens which survive the NYS Real Property Tax Law Article 11 proceedings granting title of the foreclosed property to the Municipality. (When properly notified, the IRS lien can be ‘released’ against the property once you take title.

The Treasurer’s Office can verify if all lien holders were served (including the IRS if applicable.)

Step 2 – Talk with the Town/Village:

At the Town or Village level, speak with the Code Enforcement Officer/Building Inspector and Tax Assessor about the property you are interested in to learn about what outstanding violations need correction.

If it is a vacant piece of property, these are the people to talk with about any potential construction or other “improvement” you plan to do.

Speak with Town or Village Officials about past due “water district” or “sewer district” amounts. You might have to pay them.

Look into the school taxes you will be paying and the school district.

Step 3 – View Property:

Drive by the property to see if it suits your needs and preferences for location. Our website will have a Showing Schedule for improved properties that are believe to be unoccupied. We do not show vacant land parcels.

Step 4 – Property Value?:

Learn about area values for similar properties and begin thinking about the amount you are willing to pay.

Step 5 – Review terms of auction:

Read and fully understand the Auction “terms & conditions” before bidding at the auction. Auctions are “as-is, where-is” transactions. All highest bidders (buyers) are expected to finish paying for the property and close by the terms specified. No exceptions. These transactions are not contingent upon you getting a mortgage. You must pay in full by the date specified in the terms.

Once again, do all of your homework ahead of the auction. Finally, make certain that you have down-payment money with you and on your person at the auction as immediate down payment is required.