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Expert Interview with Charles Gormly About Maryland and DC Tax Sales

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Tax Sale Resources
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Introduction

Charles Gormly is an attorney licensed in both Maryland and Washington D.C., but he’s also been an investor and a servicer in those states as well.  In his video, Charles shares his knowledge of each state from various perspectives. 

Let’s break down each in their own summaries with an emphasis that Gormly only covers the tax lien collection process and not the post-redemption judicial foreclosure process.   

Maryland

The state of Maryland has essentially 3 different types of tax sales, somewhat categorized by how they conduct their sales in the larger suburban counties, the smaller eastern counties, and then Baltimore City as its own.  

  1. All sales are held in May or June (with the exception of St. Marys county) and they are a mix of live and online sales.
  2. The counties in Maryland get to set their interest rates but most counties also practice a combination of the bid down interest rate with a highest premium bid who actually wins.
  3. Not all counties require that the entire premium bid is due for payment at the time of sale but instead only due if it goes into foreclosure (post redemption period).
  4. The redemption period in Maryland is very short at 6 months.
  5. Statutorily required noticing must commence after 4 months.
  6. You must start your foreclosure process within 2 years after the completion of the sale.

The Maryland process is a bit muddy since every county has its own process it follows.  Be sure to watch the video above or you can also learn more in a white paper by James Truitt of James F. Truitt, JR, P.A. who also specializes in Maryland.

Washington D.C.

  1. The interest of 18% is only earned on the based delinquent amount and not the surplus amount.
  2. The entire surplus amount is due within a week of the sale but will be returned if the property redeems.
  3. You can purchase the subsequent taxes that also earn interest but the city doesn’t make it easy to do so.  
  4. After 4 months from the time of sale, the purchaser must go through a posting process on the property itself.  There are other noticing requirements.
  5. You must start your notice of foreclosure within one year from the date of certificate not from the date of the sale.

Washington D.C. does have some barriers to entry as a tax sale purchaser but once you can work through some of those barriers, it certainly has some bonuses for investing.  Again, check out the video above or you can also learn more by reading a white paper by Donald Dinan of Goetzfitzpatrick.

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