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2007 UpdateThe April 2007 auction saw some reasonable prices for the first time in four years, undoubtedly due to the soft real estate market and concern about the future of prices. Clients did buy 3 residential properties. At this point I cannot accept now clients for the auctions, as my duty is first to my long term clients.
-Andrew Peck, May 4th 2007
2004 UpdateThe April 22nd tax auction was a disappointment.
After 12 years of
bargains where clients made large profits, frenzied bidding drove auction prices
above "retail." Note that the last time this happened was in 1991 and 1992, the
beginning of a substantial fall in local real estate prices. Is this a leading
indicator? Is the bubble about to burst? My guess is that it is -- that the
profligate war spending and tax cuts will catch up with us within the next year
or two and cause interest rates to rise and property values to stop rising or
fall. I rarely forecast the future, the last time was in 1996 when I forecast a
rising market. As luck would have it, prices more than doubled since then.
2003 UpdateUnlike the past several years, there were no great bargains at the May 2003 Ulster County real estate tax auction. I'd been expecting this for a couple of years, since real estate has become a hot topic. Clients bought a fixer-upper for $66K and two 2 1/2 acre land parcels for $11K and $16K. Based on the last cycle 12 years ago, I'd expect it will be a few years before we see many good deals here again. 2002 UpdateThis has been an exciting and profitable year at the auctions. Some of our client purchases included the following, at an average cost of less than 50% of market value:
July 2001 Greene County Auction UpdateAuction fever took over this auction. Prices were ridiculously high and our clients bought nothing. Many totally worthless properties were sold for high prices. This has happened in the past for a few years at a time. Then those ignorant buyers who get burned stop coming and prices come down to earth. June 2001 Auction UpdatePrices were higher this year, as expected. Client purchases in Ulster County included:
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An article from "In The Life"In Ulster County, hundreds of properties are sold at auction every year. The vast majority of these properties are sold at two types of auctions: real property tax auctions and auctions of properties on which the mortgage is being foreclosed. While in some places individuals auctioning their property is not uncommon, here it is unusual. This article will deal briefly with the risks and rewards of tax auctions in Ulster County. Other counties also auction tax delinquent properties, but the rules and procedures differ for each county. The potential rewards are straightforward, one can sometimes purchase a property for 15 to 60% its market value, but it can be daunting and risky. The county publishes a list of two or three hundred properties to be auctioned; one must first do many hours of research to find the dozen or so which may be worth bidding on. Many of the parcels sold are virtually worthless - they may be tiny, landlocked, all wetland, underwater; or even hazardous waste dumps - yet many of these are bid on nonetheless by the naive, looking for a bargain, who have never even seen the property. The county requires payment in cash and offers no guaranties whatsoever. Any of the properties can be redeemed by the former owner by payment of the back taxes right up to the day of the auction, and a majority of those of value are. With luck, a few valuable properties will actually be auctioned off. The upset, or minimum acceptable bid, is generally the amount of back taxes owed the county, often about 15% of the market value reflected by the assessment. Ulster County reserves the right to reject any bid up until the time, usually a couple of months after the auction, when it gives a deed to the purchaser. After receiving the deed, the purchaser's trials have just begun. A pun is intended, for most properties require legal action to clear the title before the property will be marketable. This is an expensive and time consuming procedure, usually taking a minimum of six months. All too often, a former owner or lienholder will sue to try to recover their property, which can tie up the property in litigation for years. In this case, the legal costs, plus the years of taxes which accrue on the unmarketable property, can easily run tens of thousands of dollars. I believe that a majority of sales at tax auctions result in losses for the purchaser. Despite these risks, I bid on properties every year. I believe that when one understands the major risks, does the necessary research, and factors into the calculation of an appropriate maximum bid both an amount for the expected future expenses and something for the unexpected, one can expect to be able to invest with a good probability of making a profit. Andrew Peck is the owner-broker of Teran Realty, serving Woodstock and the Hudson Valley. They offer buyer brokerage services for auction and conventional market purchases. He can be reached at (845) 679-3333
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Woodstock Times - 30 November 1995 |
Woodstock Times - 7 December 1995 |
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