Michael Bakalar, the administrative manager for Bakalar & Associates, a real estate law firm that works with many tax sale investors, has an exceptionally deep understanding of the Florida tax sales process. He recently shared his insights from years of accumulated knowledge and experience during a podcast interview with Tax Sales Resources' CEO, Brian Seidensticker.
Florida Tax Lien Sales
There are 67 counties in the Sunshine State and tax sales are held each year starting in May and ending by the first of June. Most counties have transitioned to online sales, and lien sales are bid-down for the interest rate, starting at 18% and going down in increments of a quarter of a percent. If bids go below 5% a mandatory interest rate of 5% is guaranteed to the winning bidder. Frequently liens are bid down below that threshold, because investors know that they will earn at least 5%. If an investor purchases a tax lien and then taxes remain unpaid into the following year, the county will sell a subsequent tax lien. In Florida, those subsequent or sub liens may be purchased by other investors, a stipulation that is different from how it works in most other states.
Florida Tax Deed Sales
The redemption period is 22 months from the date of the sale, and because Florida properties are so popular most of them are redeemed. But if the certificate holder is interested in the deed after 22 months, they can submit a tax deed application to the county to initiate the foreclosure notification process. But it is still important that investors perform their own due diligence to search for and notify parties that may hold an interest in the property, prior to the tax deed sale. Tax deed sales follow a bid-up premium format, and all subsequent delinquent taxes must be paid as well as occur in each county monthly, and the opening bids that are set are for the amount of unpaid tax, all fees incurred, and the interest calculated on all certificates. Tax deed sales are quite competitive and bidding amounts have increased drastically as real estate values in Florida have risen, so investors are cautioned to perform due diligence and bid carefully and accordingly. [One noteworthy exception within the deed sales statutes is that properties cannot be sold if they have been granted a homestead exemption and are less than $250 delinquent.]
Single Simultaneous Bidders
Some counties enforce a Single Simultaneous Bidder Rule, which dictates that a single company cannot register multiple times for the purpose of bidding. Counties that don’t have this rule and allow the use of multiple accounts try to preserve fair competition by having the computer randomly select the winner in the event of a tie. But when multiple account registration by the same party is permitted, that can potentially increase their odds of winning, giving them special advantage in the event of a random selection tie-breaker.
To Learn More about Florida Tax Sales
To learn more and Florida’s tax lien and deed sale process, be sure to listen to the full podcast interview that Brian Seidensticker did with Mike Bakalar.