Tax sale overbidding sets record

By: 
STEVE ROGERS
Staff Writer

If West Point Mayor Robbie Robinson is seen doing a dance down Commerce Street, it may be because the final numbers are in from the city's delinquent tax sale earlier this month.

Overall, the more than two dozen buyers paid in the $633,778.32 owed on the 1,500 properties plus $44,359.83 in overbids.

The 7 percent overbid is a record for the city and was about twice estimates the day of the sale.

"It's all in and we've collected it all. The mayor is happy, the selectmen are happy, it ended up being a good sale all the way around," City Clerk Eddie Longstreet said.

The 7 percent overbid rate is about the average across the state, according to GovEase.com, the company that started online tax sales in the state two years ago. Clay County is joining the online sales movement in August and if that goes well, West Point may do it next April.

According to GovEase, in 2016, the overbid rate statewide was 7.48 percent. In 2017, with online bidding in 20 counties, the rate was 12.2 percent.

Experts say adding more bidders from across the country contributed to the increase. For instance, some of the biggest buyers in last year's Lowndes County sale were from Florida, according to Lowndes County Tax Assessor Greg Andrews.

Regardless of whether online or in person, the goal in the end is the same -- hope the original property owner redeems his or her property. Then the tax sale buyer gets 18 percent interest.

In the end, the buyer could end up owning a tax deed on the property and eventually the property itself after three years.

That rate of return is about the best anywhere, but it requires tying money up for a period of time while waiting for the property to be redeemed or to obtain actual ownership.

About half the properties drew overbids, usually a technique where a buyer wants to assure themselves of holding the property. Overbidding can be a calculated risk, depending on whether the property is redeemed and when, because the buyer doesn't get interest on the overbid, only on the original amount.

But overbids are good for local governments because they get to keep that extra money.

Most overbidders do it with the idea that they know who the owner is and that it will be redeemed so if they overbid 8 percent of the tax bill, when it's redeemed they'll still get about a 10 percent margin. It can be risky sometimes, but most of the time, it pays off among the people who know what they are doing.

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