Investors near and far are gearing up for the annual tax lien auction to be held by the Archuleta County Treasurer’s Office on Nov. 3.
The tax lien sale allows the county to collect delinquent taxes owed on properties through liens placed on the properties and sold to investors.
For the third year in a row, the auction will take place online at www.archuletataxsale.com — a method Treasurer Betty Diller said has “greatly improved efficiency.”
The online auction also allows for investors to participate without being in the immediate area. In fact, Diller said deposits this year have been placed by prospective purchasers from as far away as Singapore.
As of Oct. 25, 635 properties were slated for the auction, Diller said. Originally, 711 properties were eligible, but the owners of 76 properties were able to avoid the sale as of Tuesday.
Property owners have until Nov. 1 to make a payment and avoid a lien, Diller said.
Properties involved in an in-process bankruptcy are not included in the sale, Diller said. Foreclosure status, however, does not affect a property’s inclusion in the tax sale.
Potential investors are required to deposit 10 percent of what they hope to spend on a winning bid by Nov. 1, but the Treasurer’s Office does allow for increases to deposits during the auction, Diller noted.
Payments are due by 4 p.m. the Friday after the auction closes, Diller said.
Investors can research the tax history of properties up for auction at www.archuletatax.com. The auction website, www.archuletataxsale.com, also links to the assessor’s mapping software, where lot sizes and locations may be found.
Auction prices include advertising, auction and tax sale certification fees, Diller said, adding that the amount published in the delinquent tax notices in The SUN are the total if the property goes to sale.
Additional costs, such as fees owed to property owner associations and for utilities, are only included if those fees were certified as of Jan. 1, Diller said. Those fees would have appeared on tax and delinquent tax notices that were mailed to property owners.
When a property is redeemed after auction, additional interest is charged, as well as a redemption fee. Additional fees that may be added are stated on tax notices and delinquent tax notices, Diller noted.
Before a property goes to lien, Diller said a 1-percent simple interest is charged. November, however, is charged double interest, with the authority (the county) receiving 1 percent and the lien holder receiving about the same amount.
After a lien, the property is charged with a 10-percent simple interest.
If not sold at auction, the lien becomes a county-held lien, giving the county the same rights as any other lien holder to be elgible for a treasurer’s deed following three years, Diller said.
Some properties in the auction may have previous liens, Diller said. Holders of liens that are at least three years old can endorse the lien starting in August, Diller said, saving the property from going to auction for another lien.
Those old liens are also still valid to be redeemed, Diller said.
However, if a new lien is placed on a property with an existing lien, nothing dated prior to the new lien is charged to the new lien, Diller added.
Diller said that, like other investment opportunities, there are varied reasons investors buy tax liens on properties.
She said investing in the property can provide a good rate of return, with some investors in it for the interest accrued during a three year period, while others are looking to obtain a deed to the property they purchase a lien on.
But, also like any investment, Diller continued, there are risks.
The only way to be paid for a lien, Diller said, is to start the deed process, which is also the last chance for the property owner to pay to ensure the property is free and clear.
Diller added that there are also sometimes issues with due diligence and outside accounts lien-holders may not be prepared to deal with and said that, in general, lien investments are not very liquid.
Diller cautioned that it is best to investigate a property before purchasing the lien.
“Make sure it’s something you wouldn’t mind ending up with,” she said.