Dear Premium Members:
This month I want to profile the little known
tax lien investing state of Nebraska. By state law,counties must
start their tax lien certificate sale on the first Monday in March.
Douglas County is holding its sale online. Here are links to tax sale
information for some other counties that are holding public auctions:
Adams County, Nebraska
March 7, 2011http://www.adamscounty.org/treasurer/tax_sales.htm Buffalo County, Nebraska
March 7, 2011http://www.buffalocounty.ne.gov/offices/Treasurerhttp://www.buffalocounty.ne.gov/offices/Treasurer/PDF/20110204Advertising.pdf Douglas County, Nebraska
February 3 - March 7, 2011https://www.douglastaxsale.com Hall County, Nebraska
March 7, 2011http://www.hallcountyne.gov/content.lasso?page=7451&-session=hcv:4C5C891C0565f19C2Fthqny49F9CLancaster County, Nebraska
March 7, 2011http://lancaster.ne.gov/treasurer/pdf/ts_info.pdfhttp://lancaster.ne.gov/treasurer/pdf/ts_prereg.pdf http://www.irs.gov/pub/irs-pdf/fw9.pdfSarpy County, Nebraska
March 7, 2011http://www.sarpy.com/taxsalehttp://www.sarpy.com/treasurer/documents/Del2011list.pdf
If you are interested in a different county, vist http://www.naco.org
mouse over "About Counties" and click on "Find a County," and then
click on the state of Nebraska. Click on the county you are interested
in, and then on the county link provided on the next page. Once you are
on the county's website, look for a link to the Treasurer, which is
usually under a header such as department, elected officials or
for our recently revised tax sale calendar (password = taxsales).
In Nebraska, the state-mandated interest rate on certificates is 14
percent. Bids are entered with the certificate going to the bidder
willing to pay the delinquent taxes for smallest ownership portion of
the property in the event the property is foreclosed. Simple interest
accrues at an interest rate of 14 percent annually or .039 percent
every day. Three years from the date of the tax auction but
no longer than three years and six months from the auction, the tax
certificate holder can begin the foreclosure process against the
property. Failure to do so within the allotted time will result in the
tax certificate becoming worthless.
following is a discussion of the tax lien sale process in Nebraska.
It will be followed by a screen of the Douglas County tax sale list.
: Nebraska Revised Statutes (NRS), Chapter 77: Revenue and Taxation, Section 18 (NRS 77-1801 through 77-1863)
Conducting the Sales
: County Treasurer
Administrators of Sales
: Yes: Realauction (http://www.realauction.com
: The sale
must start on or after the first Monday in March. (NRS 77-1801)
Typically, counties hold their tax sale on the first Monday in
: Simple interest accrues at an interest rate of 14 percent annually or .039 percent every day.
The lien may be redeemed at any time within three years after the date
of the sale; and no longer than three years and six months after the date of the sale.
The tax lien list is published in a newspaper once a week for three
consecutive weeks beginning the first week in February. In many
counties, the list is available on the County Treasurer's website.
It is common policy throughout the state of Nebraska that bidders must
be separate and distinct bidders. Bidders who register as basically the
same entity will be disallowed and only one representative will be
allowed to participate.
Most counties will require a good faith deposit equal to a
percentage of the total dollar amount of liens the bidder anticipates
winning. For example, if a bidder anticipates winning $100,000 in tax
lien certificates and if that county requires a 10 percent deposit, the
bidder must deposit $10,000 with the Treasurer.
counties do not require a deposit. Instead, the bidder creates a
“budget” based on the total amount they want to invest in that auction.
The budget must be created before bids can be placed. The budget will
limit how much a bidder can win no matter how many bids are placed.
Some counties allow bidders to create a budget for each batch.
: The total amount of unpaid real estate taxes, assessments, penalties, advertising costs and fees.
The winning bidder is the person willing to pay the delinquent
taxes for smallest ownership portion of the property in the event the
property is foreclosed.
any person present at the sale states they want to bid down potential
ownership of a given parcel of real estate, the county will hold a bid
down auction. The person who offers to pay all the taxes due on any
real property for the smallest portion of the same shall be the
purchaser, and when such person designates the smallest portion of the
real property for which he or she will pay the amount of taxes assessed
against any such property, the portion so designated is considered an
undivided portion. The smallest bid accepted is zero percent.
no person makes a request to bid down on any parcel, the sale is
conducted as a round robin (used extensively in Nebraska), with 100%
undivided interest implied. If the sale goes to round robin, and a
bidder's randomly assigned number is chosen, he may choose to accept
that parcel which is offered to him in the round robin or pass. If the
bidder chooses to pass, he passes to the next chair, and so on. The
bidder's turn in that round is done until the County Treasurer goes
around the whole room of bidders. If the county proceeds in this
manner, and someone announces their desire to bid a parcel down, then
the parcel will be bid down.
methods vary for each county. Generally, deposits and payments may be
made via ACH (electronic check), wire transfer, cash, cashier’s check,
or money order are accepted.
The successful bidder will receive a certificate in writing, describing
the real property purchased, the sum paid, and the time when the
purchaser will be entitled to a deed. The certificate will be signed by
the County Treasurer. (NRS 77-1818; see 77-1819 for the form the
certificate will appear as.)
Certificates issued for tax liens that were not sold during the auction
are struck to the County and become available for purchase at the
Treasurer's office once the auction is closed and balanced. (NRS 77-1814)
If taxes subsequently become delinquent again, the certificate holder
may pay those and add the amount of the payment to the current
certificate. Those funds earn interest from that moment on.
14 percent from the date of the sale. Redemption may occur at any time
before the delivery of tax deed by the County Treasurer by paying the
sum mentioned in the certificate, with interest from the date of
purchase to the date of redemption, together with all other taxes
subsequently paid, whether for any year or years previous or subsequent
to the sale, and interest at the same rate from the date of such
payment to the date of redemption. (NRS 77-1824)Process
Lien is Redeemed
The County Treasurer will send written notice of redemption, by
registered or certified mail, to the holder of the certificate of
tax sale at the address on file with the County Treasurer. The
redemption money will be paid to or upon the order of the holder on
return of the certificate. (NRS 77-1825)Assignment
The certificate can be sold and transferred (for $10) to another name.
An assignment vests in the assignee, or his or her legal
representatives, all the right and title of the original purchaser.
Three years from the date of the delinquent tax auction but no
longer than three years and six months from the auction, the
tax certificate holder can begin the foreclosure process against the
property. Failure to do so within the allotted time will result in the
tax certificate becoming worthless. (NRS 77-1856)
to author Jamaine Burrell, as quoted on the Sarpy County Treasurer's
website, if you are a winning bidder at less than 100% ownership
interest, a Treasurer’s deed allows both the bidder and the original
owner to hold tenancy-in-common interest in the property. The bidder
holds interest at the percentage that he or she bid at auction and the
original owner holds the remaining percentage of interest in the
property. For example, if a winning bidder purchases a tax lien
certificate for 85 percent interest in the securing property. Upon
foreclosure, the tax lien certificate holder owns 85 percent of the
property, and the original property owner owns15 percent. The two
parties become tenants-in-common. Competitive bidding down for
tenancy-in-common ownership provides an opportunity for the original
property owner to retain partial ownership in the property and also to
control the disposition of the property. The original property owner’s
percentage of the tenancy-in-common, however small,
new partial owner from selling or financing the property. For either
party of the tenancy-in-common to sell or secure financing against the
property, both parties must agree to the action or initiate a partition
action, which is a request to the courts to sell the property and split
the proceeds from the sale in proportion to each party’s percentage of
There are statutory time lines for both
foreclosures and deeds, and if they are not met according to these
statutes, you could lose your entire investment. Statutory requirements
include notification timelines that must
be met prior to three and one-half years. Many
County Treasurers recommend hiring an attorney. The Sarpy County
Treasurer's website notes that fees for foreclosure have been quoted at
$750 and up. If a foreclosure is filed, you are required to notify the
County Treasurer of the court case. You area also required to send a
copy of the dismissal of the case when this occurs.
DOUGLAS COUNTY, NEBRASKA
Douglas County tax lien certificate sale is conducted, for the County
Treasurer, by Realauction.com. This is a privately owned company
specializing in the advertising and sale of delinquent tax certificates
for local governments and municipalities. Last month's special report
featured a tax lien sale also conducted by this company (Yavapai
February 3, 2011 = auction begins
March 3, 2011 at 4:00 p.m. CT = deadline for deposit (deposit requirement is 10% of your intended investment)
March 7, 2011 at 5:00 p.m. CT = auction ends
March 9, 2011 at 2:00 p.m. CT = payment deadline
Important Note: In
all previous Douglas County tax certificate auctions, liens have
been sold at 100 percent ownership. Ownership of less than 100 percent
raises questions concerning title insurance and foreclosure rights, so
be sure you know your rights before placing bids at less than 100
Douglas County: http://www.douglascounty-ne.gov
Douglas County Treasurer: http://www.dctreasurer.org
Douglas County Property Assessor: http://www.dcassessor.org
Douglas County Clerk of the District Court: http://clerk.dc4dc.com
Nebraska Government: http://www.state.ne.us
is a great deal of information available online that you should read
before you register for the tax lien sale. First, visit the
Treasurer's website at http://www.dctreasurer.org. There is a link in the left-hand column for "Tax Lien Sale," which takes you directly to the auction website at https://www.douglastaxsale.com.
The County Treasurer does not provide any information about the sale on
its website, but you may want to contact the Treasurer's office to see
can find out any information regarding last year's sale. Contact
information is as follows:
Once you are on the auction website at https://www.douglastaxsale.com, read through the information available by
clicking on the following links:
Administration: (402) 444-7082
Information: (402) 444-7103
- Start Here: a discussion of how the sale works
- Bidding Rules: mandatory reading for first time Nebraska tax certificate bidders
- Preview Items for Sale: the list of certificates currently up for auction
Once you are comfortable that you understand the process, proceed with
registering yourself as a bidder.
You only need to register for the sale at the official auction website.
There is no additional registration that needs to occur through the
County Treasurer. Click on the link "Register" on the home page of the
official auction website. The site (https://www.douglastaxsale.com/form2.cfm
) will walk you through the entire
training information, click on the links "Training General Information"
and "Tax Certificate Process" on the home page of the auction website
Live "webinar" training classes will be held via the Internet by
Realauction on the dates and times listed on the website at https://www.douglastaxsale.com/training.
The classes last approximately 90 minutes, cover use of the software
only, and are free of charge. Attendance is by registration only. You
will need to contact the Realauction Customer Service Center
(877) 361-7325 in advance to register. The next and last bidder
training webinar is this Friday, February 25, 2011, at 9:00 a.m. CT
(10:00 a.m. ET).
n addition to the webinar classes, Realauction offers a fully
functional "practice" site at http://www.arizonataxsale.com
that you can use to familiarize yourself with the online auction
process. The practice auctions are held every day and close
2:00 p.m. MT.
From the home page of the practice site (http://www.arizonataxsale.com
additional training materials are available by clicking one of
two "Site Guided Tours" which contain page-by-page instructions on how
to use the site.
You can also call the Realauction Customer Service Center and a
representative will assist you.
4: Tax Sale List
The tax lien list is available on the official auction website at https://www.douglastaxsale.com/view_bids.cfm (click on "Preview Items for Sale"). You will be able to sort the list and it has been populated with
external data. The list is 156 pages long.
As you can see, for each certificate listed there is an ADV number, a
parcel ID number, a face amount, and a status.
The ADV number
linked to a page on which the County Treasurer has compiled a lot of
important information for you already:
Pay special attention to any blue icons to
the right of the ADV number column. Be sure to click on the icon and read the accompany information.
The Parcel ID
is linked to a page that provides the following useful information:
Advertising Number, Face Amount, Parcel ID, Alternate Parcel ID,
Property Address, Property City, Property Zip, Use Code, Use
Description, Year Built, Construction Type, Lot Size, Acres, Beds, Baths,
Living Sq Ft, Adjusted Sq Ft, Legal Description, Sale Date, Sale Price, Gross Sq Ft, Section, Township, Range, and Tax Area
Summary: Unpaid Certs, Past Years Outstanding, Redeemed Certs, Current Number of Bids
- Valuation: Homestead Amount, Building Value, Land Value, Total Value
Information: Owner Name 1, Owner Name 2, Mailing Address
1, Mailing Address 2, Mailing Address 3, Mailing City, Mailing State, Mailing Zip Code
- Data from 2010 Tax Roll:
Cert Year, Cert Number, Status Type, Buyer Number, Tax Deed Info,
Notes, Original Sale Date, Days Open, Original Face Amount, Bid Int.
the minimum bid for the certificate. You can sort by ascending or
- property information (key number, account type, parcel number, parcel address, legal description
- value information for several tax years (land, improvement, total)
- show all transactions: sales date, book number, page number, sale price, grantor, grantee, 521 link
- land information: acres, square feet, units, depth, width, vacant status
- Google map
- link to interactive GIS map
- link to Treasurer's tax report: taxpayer mailing address, property information, tax information for 2010, tax payment history
- link to print report
Finally, the Status column
lets you know whether the certificate is active (i.e., available for sale) or unavailable.
Again, you can sort by ascending or descending.
5: Screen the List
the Quick Search, set up your criteria based upon residential
searches, minimum tax lien amount, value, acreage or even city.
Example: If you want to search
for residential properties, you can set up a search criterion of
between 3400 and 3600 for the land use codes.
If you want to search for properties with more than 3 acres, use the acreage greater than search.
Come up with your own criteria, then click on the property links to determine what the underlying lien is worth.
I like land. This is a personal preference. So I set up a search of
more than 5 acres, one year of taxes owed (recent liens), value greater
than $50,000 and the face amount of the lien less than $10,000.
The result is 43 potential liens. More than enough to get started.
Next, I like to arrange the liens based in order of Face Amount by
clicking on the the ascend or descend arrows. Now, earch Parcel I.D. is
linked to a file for more information and the link for the ADV number
will also tell you how many others are bidding. Finally, there are maps
presented to help you locate your lien of interest.
Also, note the Download Results link. This will allow you to download a
CSV file, which is a file that will load into Excel. If you are
technically savvy, try downloading the CSV (comma-delimited) file and
run your searches on Excel.
When you are ready to bid, you will enter a bid based upon the
percentage you are willing to accept. If you bid 100%, which is the
norm, and everyone else bids 100%, then you will be part of the random
bid selection. Otherwise, you can bid a percent ownership, which is
Let's say you are aggressive and decide to bid the lowest percentage
possible, which is 1%. If you are the winning bidder, you will still
earn 14% if and when the lien is redeemed. If the lien is not redeemed,
you will have a difficult time foreclosing on your ownership.
Ultimately, you can force your lien of 1%, but not foreclose on
ownership. It sounds like a great time to read the laws or look at our
CD of tax sale laws.
The point is if you plan on bidding lower than 100%, then you better
make sure it is a lien that will be redeemed; otherwise, it could be
years of waiting and a lot of legal fees.
Assignment: Find the lien priced at less than $200 on a property worth
more than $1,000,000. Do you recognize the owner? Who is it?
Wishing you the best,