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Distressed Property Available in Marion County

Now could be an opportune time to buy "distressed" property in Marion County. In addition to the available bank-owned properties and foreclosures on the market, thousands of properties were made available to the public at the Marion County tax sale on January 16, 2009. Between 2,000 and 2,500 properties remained unsold after at the sale, which means that the upcoming surplus sale in Marion County may be the largest ever.*

When property taxes are not paid on a property for more than a year, the property can be made available to the public at a tax sale. The minimum bid for a tax sale property is the amount of property taxes owed, plus a small administrative fee. A wide variety of properties are offered for sale at a tax sale. In the October 2008 tax sale in Marion County, successful bid amounts ranged from $393 to $1,420,000.

A successful bidder at a tax sale does not immediately own the property. There is usually a waiting period of one year, during which time the property owner may "redeem" the property by paying the successful bid amount plus fees and interest. (This waiting period is shortened to 120 days for properties that have been identified by the Metropolitan Development Commission for redevelopment.)

If the property is redeemed after the tax sale, the successful bidder will receive a return of funds expended together with 10 to 15% annual interest thereron. 2007 statistics show that 57.5% of properties sold at a tax sale were redeemed by the original owner. The successful bidders in these transactions came away with at least a 10% annual return on their investment.

If a property does not sell at a tax sale, the County may offer the property for sale at a surplus sale. At the surplus sale, the minimum bid changes from the amount of taxes owed to an amount decided upon by the County. In addition, successful bidders at a surplus sale take immediate ownership of their purchased properties.

Purchasers at a tax sale or surplus sale should understand that all properties are sold "as-is." The County does not guarantee that the properties are free and clear of all encumbrances, judgments, liens, etc. Therefore, significant research must be done prior to purchasing property at a tax sale or surplus sale.

Notwithstanding the risks involved, these sales present potential investing opportunities.

* The tax sale is usually held in October, and the surplus sale is usually held in March. Because of the additional tax sale held in January, the surplus sale may be held later than usual this year. For more information about the Marion County tax sale or surplus sale, please contact Alan Culwell @ (317) 968-5525 or the Marion County Treasurer's Office at (317) 327-4444.

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