Maureen Zink is an attorney with the Carlisle law firm in Cleveland, Ohio. Having specialized for more than decade in areas of the law that apply to distressed properties, she’s an expert on how Ohio’s tax sales and foreclosures work. She recently delved into those nuances during a podcast interview with Tax Sale Resources CEO Brian Seidensticker.
An Overview of Ohio Tax Sales
Ohio is a tax lien state, with a one-year redemption period, and most sales usually occur during the autumn months. About half of the 88 counties in Ohio offer tax lien sales, whereas others only offer foreclosure sales – and it depends on what the County Treasurer decides. There are also two types of foreclosure sales in Ohio, namely bulk sales and negotiated sales.
Ohio Negotiated Sales
Negotiated sales have become the preferred type of sale for County Treasurers. These negotiated sales are basically done by a sealed bid proposal, and after bids are submitted they are evaluated by the county that decides who wins the bid. Most counties require that bidders show evidence that they have the financial resources to complete a purchase. Each county has its own particular terms, review process, and response time. Check with the local County Treasurer to fully understand their particular terms and rules, as part of your due diligence.
Ohio Bulk Sales
Bulk sales follow a traditional auction format, and they start at 18% interest and are bid down in increments of a quarter of a percent, with the lowest bid being a quarter of a percent. In the event of a tie, the winner is chosen by a method decided by the County Treasurer, but it’s often by a random raffle-style drawing. Because it’s a bulk sale, the winner is agreeing to purchase the entire lot of parcels that are included in the sale.
The Foreclosure Process for Ohio Lien Certificate Holders
To foreclose on a delinquent taxpayer who fails to redeem, you have to file a Notice of Intent with the County Treasurer, and pay any taxes that may have become due since you originally purchased the certificate. You must start the foreclosure within 120 days from the date that the county signs off on the Notice of Intent, although it doesn’t have to be completed in that timeframe. If you miss that 120-day window the tax certificate can be voided, so investors should be vigilant so they don’t risk having their certificates expire and become essentially worthless. (If it’s a negotiated sale, you may be able to negotiate for a slightly longer timeframe, such as 180 days.) Certificates are good for at least three years, and some are valid for as long as six years. Be sure to check with the county to know how long your certificate will be valid for being you purchase it. If you’re buying on a secondary market the lifetime of the certificate is printed on the front of the certificate.
Private Selling Officers in Ohio
Since 2016, Ohio has allowed some designated licensed real estate auctioneers to conduct foreclosure sales. So although they are both generally referred to as sheriff’s sales, the foreclosure sale may be done in the traditional way by the sheriff or through one of those auctioneers, referred to as a Private Selling Officer (PSO). In both circumstances, it is the sheriff’s responsibility to appraise the property, and whoever is conducting the foreclosure sale must advertise it for three consecutive weeks prior to the sale. You should be able find the property listings on the PSO or sheriff’s website, and the information will usually include the appraisal, the terms of the sale, the opening bid, and instructions on how to participate. While sheriffs generally conduct sales in person, the majority of PSOs do theirs online.
Learn More about Ohio Tax Lien Sales
As you can see, when it comes to tax sales Ohio has unique formats, procedures, and statutes – and it is very important to have a solid understanding of those before you invest. To learn more, you can read Zink’s comprehensive white paper about the Ohio foreclosure process. Also be sure to listen to the complete, in-depth podcast interview she did with Brian Seidensticker. Tax Sale Resources also has another full interview on the Ohio tax sale process with Austin Barnes of Sandhu Law Group.