Dear Premium members:

First read through this discussion on Bid4Assets so you can understand how to signup and navigate their online bidding system.

Then, continue on below to the Benton County tax foreclosure sale.

Bid4Assets (“B4A”) is an online auction marketplace for high-value assets like real estate. County government agencies partner with B4A to sell, among other things, tax-defaulted property online. According to B4A, they are the largest seller of tax-defaulted properties on the Internet. They assist more than fifty counties nationwide with bringing their tax sale auction process online.  

http://www.bid4assets.com

An auction calendar for county tax sales is at http://www.bid4assets.com/help/index.cfm?fuseAction=TaxSale. Upcoming county auctions are continuously added to the site's calendar. You can also sign up for the B4A County Tax Sales Email Alert (http://www.bid4assets.com/storefront/?sfID=69) to be notified when new sales are introduced to the site. Alerts are typically sent out within two business days of when a county auction goes on preview. You must be a registered user to receive the alert.

B4A offers a number of tools and resources to potential investors to enhance their buying experience. Besides the County Tax Sales Email Alert, they include the following:

How to Participate in a B4A County Tax Sale auction: Learn how to most effectively navigate their website and quickly find what you’re looking for with B4A’s user-friendly, step-by-step guide to participating in County Tax Sales.
http://www.bid4assets.com/help/index.cfm?fuseAction=howToParticipate

Frequently Asked Questions: Answers to 19 frequently asked questions.
http://www.bid4assets.com/help/index.cfm?fuseAction=TaxSaleBuyerFAQ

County Tax Sales Glossary of Terms: Terms includes definitions to all the key tax sale auction terms.
http://www.bid4assets.com/help/index.cfm?fuseAction=TaxSaleGlossary

National Association of Counties: Link to the organization representing the nation's County governments. On the NACO website you will find contact information for County officials, state maps showing county boundaries and more.
http://www.naco.org

There are no fees to participate in a county tax sale auction. However, according to the FAQs, anyone who wishes to bid at the online public auction must register with B4A and submit a pre-bid deposit within the posted deadlines to qualify as a bidder. A bid deposit helps a taxing authority ensure that only qualified and authorized bidders participate in its auction. Funding of a bid deposit account demonstrates a bidder’s ability to comply with a County’s Conditions of Sale and ensures performance of a winning bidder. A winning bidder’s deposit becomes a non-refundable down payment on purchases. However if you do not win any tax sale auctions your deposit will be refunded to you.

Steps for Participating in a County Tax Sale

The steps for participating in a county tax sale (http://www.bid4assets.com/help/index.cfm?fuseAction=HowToParticipate&#auctionends) are as follows:

Registration

Registration is required to participate in any County Tax Sales. The process is free, easy and only takes a few minutes to complete. 

You should first read through the terms and services at http://www.bid4assets.com/Help/index.cfm?fuseAction=termsofservice.

Property Research

B4A urges interested bidders to examine the title, location and desirability of the properties available to their own satisfaction prior to the sale. A complete list of properties available for auction is posted for viewing and downloading three to four weeks prior to the auction date. When you find an item you're interested in bidding on, B4A recommends you make sure you read the entire listing description and any additional information included in the "Additional Details" tab.

After reviewing the information included in the auction listing, B4A encourages you to contact the Tax-Collectors Office of the County in which the property you are interested in is located if you have additional questions. This information can be found in the center of the County specific storefronts.

For questions regarding the auction and the bidding process, you can contact service@bid4assets.com.  

It's important to remember that bids are binding contracts; if you are the winning bidder, you are legally obligated to purchase the item. Make sure you have done all necessary research before moving forward with your bid.

Place Deposit

Most counties require bidders to place a deposit prior to placing their first bid. A "BidDeposit" helps the County ensure that only qualified and authorized bidders are participating in its auction. Generally a "BidDeposit" is good for bidding on any and all auctions within that County and will not be transferable from County to County. Deadlines to place your deposits are set for 7 days before the close of the last auction for a particular County. "BidDeposit" deadlines, specific to the County you are interested in, are located on the County Specific Storefront.

The acceptable forms of deposit method vary by County. County-specific deposit instructions are located under the General Tax Sale Information tab in the "County Terms of Sale" document. B4A does not charge a fee to place a BidDeposit.

A step-by-step guide on how to place a bid deposit is available at http://www.bid4assets.com/help/index.cfm?fuseAction=howToBid. See also the information provided at http://www.bid4assets.com/help/index.cfm?fuseAction=howToBidDeposit. You should review both of these guides.

Bidding

Only registered B4A users can place a bid.

Auto Bid is a maximum bid which is held in confidence by the system. B4A will use only as much of the maximum bid as is necessary to maintain the bidder's high bid position or to meet the reserve. (In Reserve Price Auctions, if your maximum bid is the first to meet or exceed the seller's reserve price, the system will automatically move your bid up to meet the reserve, and bidding will continue from there.)

The System will default to Auto bid if not instructed to do so otherwise. To choose a Flat bid option, click on the radio button next to Flat Bid. 

When you are ready to place a bid, choose a bid type, enter your bid amount in the Bid Amount box and click on the Bid on this item button. You will be prompted to login (or register, if you haven't already).

Once you've submitted your bid, you will receive a bid confirmation notice via email and a similar notice will be placed in your My Messages in-box located within My B4A. 

A more comprehensive, step-by-step guide to bidding is available at http://www.bid4assets.com/help/index.cfm?fuseAction=howToBid. You should review this information.

You can monitor your with B4A’s auction management center, My B4A. You will also receive county auction updates in your My Messages center also located in the My B4A section of the site. (Please note: Includes information on counties withdrawing properties. Also, when a property is withdrawn from a B4A County Tax Sale auction the word “withdrawn” is added to the auction listing title alerting bidders that the property is no longer available.)

Frequently asked questions about bidding are at http://www.bid4assets.com/help/index.cfm?fuseAction=buyerBidding.

When an Auction Ends

If you are the winning bidder of a County Tax Sale auction, you will receive an e-mail (and message in your My Messages in-box) from B4A with settlement and deed transfer instructions within 24 hours. As a winning bidder your deposit will be transferred to the County Tax Collector as a non-refundable down payment for the property. Your bid is a binding contract.

If you are not the winning bidder on the auction, your deposit will automatically be refunded within 10 business days of the close of the auction.

Online check deposits are refunded by online check (ACH) to the originating bank account within 10 business days of the day the auction closes.
Check or wire deposits are refunded by check, to the name and address provided in your Bid4Assets profile, within 10 business days after the close of the auction. To confirm your profile information, click on the My Profile link located in My B4A.

Frequently Asked Questions About Bidding

B4A provides the following answers to frequently asked questions about bidding at http://www.bid4assets.com/help/index.cfm?fuseAction=buyerBidding.

Who can bid?
Only registered Bid4Assets users and those capable of forming legally binding relations under applicable law can place a bid. Click here to register (https://secure.bid4assets.com/Register/index.cfm?fuseaction=startReg) or refer to the Terms of Service for more information on who can bid.

How do I bid?
Before placing your first bid, thoroughly review the auction description and any additional details included in the listing. Remember, it is incumbent upon the bidder to verify all information provided and conduct additional research before placing a bid.

When you are ready to place a bid, choose a bid type, enter your bid amount in the Bid Amount box and click on the "Bid on this item" button. You will be prompted to login (or register, if you haven’t done so already.) 

For auctions that do not require a deposit, Bid4Assets requires that a bidder provide a valid credit card or debit card number prior to pacing a bid. Bid4Assets will confirm that the card is valid but will not charge your card or place a "hold" on funds. The process is free, quick and secure and, if successful, your bid is placed immediately.

Verify your bid amount and check the boxes next to “I have reviewed and researched asset details to my satisfaction and Bid4Assets Terms of Service and I agree to allow my credit cared to be charged $250 in the event I am a non-performing bidder”. Then input your credit card information – if you have previously bid and want to use the same credit card you can check off to use your existing card or input new credit card information. Enter your password and click on the Bid Now button.

If a bidder does not complete a transaction after placing a winning bid, their card will be charged $250 for a real estate auction and $100 for all other auctions. 

If the auction has a deposit requirement, follow the instructions for your preferred deposit method.

Click here for a more comprehensive, step-by-step How to Bid guide: http://www.bid4assets.com/help/index.cfm?fuseAction=howToBid

What is an Auto Bid?
Auto Bid is the maximum bid you’re willing to bid on the auction. Bid4Assets will automatically increase your bid to maintain your high bid position or to meet the reserve price.

Please note: If two bidders place auto bids for identical amounts on the same auction, and this amount is the high bid when the auction closes, the first auto bid that was placed will be the winning bid.

Our system defaults to Auto bid. To choose a Flat Bid option, click on the radio button next to Flat Bid.

Examples of Auto Bid:

A) If the auction has a minimum bid of $200 and you enter your maximum bid amount of $400, your bid will automatically be placed at $200. Your bid will automatically increase as other bidders participate, up to your $400 maximum bid amount.

B) If the auction has a Reserve Price of $20,000 (this amount is hidden from bidders) and you enter an Auto Bid amount of $18,000, your bid will automatically be placed at $18,000. The Reserve Price has not been met so there will be no winning bidder unless additional bids are placed.

C) If the auction has a Reserve Price of $20,000 (this amount is hidden from bidders) and you enter an Auto Bid maximum of $21,000, your bid will automatically be placed at the Reserve Price of $20,000. If another bidder jumps in, your bid will automatically increase until you meet your $21,000 maximum bid.

What is a Flat Bid?
Flat Bid is a one-time bid for the amount you indicate. Unlike Auto bid, which automatically increases your bid amount to maintain your high-bid position, when a Flat bid is placed — you will have to manually place another bid to maintain your high-bid position.

What is BuyNow?
A BuyNow auction means you can bid on the item one of two ways:

(1) If you are willing to offer the BuyNow price before the first bid comes in, you win the item immediately and the auction ends. 

(2) If you place a bid first instead of offering the BuyNow price, the BuyNow option disappears. Then the auction proceeds as a regular online auction.

BuyNow auctions are identified with the following icon:  . You MUST click on the BuyNow icon to choose this option.

What is a Reserve?
A reserve price is the minimum dollar amount a seller is willing to accept for an item. This amount is not disclosed, but bidders are notified (“reserve met” message appears on the auction listing) once the reserve price has been met.

Why isn’t the reserve price disclosed?
The seller has set the hidden reserve price to protect his or her financial interests. It is the price at which the seller is obligated to sell.

What is a Bid Increment?
A bid increment is the minimum amount you can bid above the current bid price. A bidder can place a bid amount that is equal to or greater than the bid increment, just not less than the bid increment.

Can I place a bid for less than the Minimum Bid amount?
No. The Minimum Bid is set by the seller and is the floor at which bidding begins.
Can I remove or cancel a bid?
Bidders are urged to use the utmost care in placing a bid. A bid amount cannot be removed or cancelled from an auction once it is placed. A bid is a binding contract between buyer and seller; an irrevocable offer to purchase an item from the seller at the stated bid price. Buyers are required to conduct any research or due diligence of an asset prior to placing a bid.

Can I change my bid?
It depends on how you placed your bid.

If you placed an Auto Bid, you may raise or lower your bid amount by entering the new bid amount in the yellow bid box and clicking on "Bid on this item".
Note: You can lower your bid amount only one bid increment above the current bid amount.

If you placed a Flat Bid, you cannot lower, remove, or cancel the bid. If you have made a typographical error in your bid amount,(i.e. intended to place a Flat Bid of $10,000 but accidentally typed $100,000) you must contact Customer Service at service@Bid4Assets.com immediately to report the error. During regular business hours (9am-7pm EST M-Th. and 9am-5pm EST Friday) you may call Customer Service at 1.877.4ASSETS. We will review each situation separately and use discretion about honoring your request. Bidders are urged to use the utmost care in placing a bid.

Can I increase my bid if I am the high bidder?
Yes. If you are the current high bidder, you can increase your bid amount. Enter your bid in the “Place Your Bid” box to submit a higher bid amount. If you have a maximum Auto Bid amount that you would like to increase, type the new bid amount in the yellow bid box and click on the "Bid on this Item" button.

What happens if I am the winning bidder and I back out of the purchase?
All bidders should be aware that they have entered into a legally binding agreement if they place a winning bid on an auction on Bid4Assets or Bid4Homes. Please see our Terms of Service, section 3.3 (b.) “offer and acceptance – binding contract between buyer and seller.” Every bidder must agree to the Terms of Service before bidding.

We take bidder performance very seriously and expect every winning bidder to complete their transaction. We vigorously enforce any violation of policy.

A “non-performing” winning bidder will be subject to the following penalties:

If a deposit was required to bid, your deposit will be forfeited.
If the auction does not require a deposit, bidders are required to have a valid credit card number on file prior to placing a bid (Bid4Assets will not charge the card or place a "hold" on funds). Non-performing bidders will be charged a fee of $250 for real estate auction and $100 for all other auctions.
∑ For the first, non-performing, offense: You will be automatically suspended from buying or selling on Bid4assets and Bid4homes for 60 days. You must request re-instatement in writing via email to service@bid4assets.com. Suspension will be lifted 60 days after we receive your request for reinstatement.
∑ You will be permanently suspended from out site for a second offense.

What is a deposit?
Most government auctions conducted by Bid4Assets require interested bidders to submit a deposit — specified by the seller — prior to placing a bid on an auction. Following the auction, the Seller will receive the deposit from the winning bidder as a purchase deposit payment for the asset. If a winning bidder, for whatever reason, does not perform on the auction their deposit is forfeited and their Bid4Assets account is suspended. For more details and instructions on how to place deposit, click here.

Note: Bid4Assets is currently Beta testing offering deposit services to private sellers. The service is not yet available site-wide.

What is an Overtime period/What is Overtime Bidding?
Similar to when an auctioneer continues to take bids until the last bidder bids; B4A’s Overtime Bidding keeps an auction open for bidding until there are no further bids for 5 consecutive minutes. Overtime bidding occurs automatically when a bid is placed within the last few minutes of an auction. The auction will remain open until an entire overtime increment (5 minutes) has passed without any bidding. The overtime increment is indicated on the auction listing page.

What is a Buyer’s Premium?
Buyer’s Premium is an optional fee that sellers can add to the winning bid amount of an auction to cover costs associated with their auction. The fee can not exceed 10% of the winning bid amount and is included in the total purchase price paid by the buyer to the seller. The buyer’s premium percentage is indicated on the auction listing and displayed during the bid process. The seller is responsible for collecting the Buyer's Premium from the Buyer.

What does the   icon located in the Seller Information box indicate?
All sellers on Bid4Assets are authorized through an ID Verify process provided by Verid Identity Verification and include the icon on their auction listing page. Seller ID Verify significantly decreases Internet fraud and our buyers are assured they are doing business with sellers who are who they say hey are. 

Benton County Information

Before we start let's look at some general information for Benton County. One of the fastest and most convenient sources of information is Wikipedia. Simply go to Google, Yahoo!, Bing or your favorite search engine and type in "Wikipedia Benton County Washington."



You should be able to find some general information. I love to look at the demographics and see whether the County is increasing or decreasing in population and its size. Benton County is over 160,000 in population, its increasing in size and it has some unique characteristics, like vineyards and wine tasting. Remind me to make a trip. It's right next to Oregon, which I know has some nice wines.

I also noticed that there are two Ghost towns, the Hanford Nuclear reservation nearby, wildlife reserves, the Columbia River

General Information
http://en.wikipedia.org/wiki/Benton_County,_Washington

To find the main county website, search on http://www.naco.org, got to "About Counties," click on Washington and find Benton County.

Or, if you prefer a search engine...type in a specific search, such as "Benton County Washington Website."

Main County Government Website
http://benton.municipalcms.com/default.aspx

From the main website you should be able to find the Assesor and Treasurer's office.

Treasurer
http://www.co.benton.wa.us/pView.aspx?id=846&catid=45
In Washington you will find tax foreclosure sales information listed with the Treasurer. If Bid4Assets weren't conducting the sale, this is where you would find the tax sale list or call and ask about it. The Treasurer's office will also have detailed information on each parcel, such as the tax rate, delinquent taxes, tax history, etc.

Assessor - Property Search
http://bentonpropertymax.governmaxa.com/propertymax/rover30.asp
The Assesor's Office is where you will find the property value, owner's name, site address, lot size, house description and much more. For example, I just looked up one of the property's on the list and although Bid4Assets has a ton of information, I had to look up house size and number of bedrooms. Try this search by using the APN number or type in this number 134084120002008.

If you really do some looking around, you will also find some nice background information.

Also, keep in mind the actual tax sale foreclosure laws of Washington.
http://apps.leg.wa.gov/RCW/default.aspx?cite=84.64

Okay, that's it for the background, now back to the Bid4Assets site.
www.bid4assets.com

After the introduction, I am assuming that you've signed up if you want to bid.

Step 1: Find the List
Click on the Benton County link on the home page or go directly to this link:
http://www.bid4assets.com/storefront/index.cfm?sfID=547

You now have three choices for going through the list.
1. Bid4Assets website. The list is small enough that you can do all of your research on the Bid4Assets site by clicking on the APN links. The advantage of using the Bid4Assets site exclusively is the site show redemptions or properties that have been withdrawn. The PDF file and the Excel file do not show the update redemptions.
2. PDF file. A PDF file is provided. Be careful with this file. The file has three copies of the list. As I compared it to the Excel list, I wondered why it was much larger in size. Well, it's a mistake. No problem.
3. Excel file. My favorite option is the Excel file, even though I had to update the redemptions. Why? I like screening and the speed of working on my computer without relying on a superfast and continuos web connection.

Click on the download file and open the document using Excel, Open Office (Free) or another compatible spreadsheet.


Step 2: Screen the list
Screen number 1 is always for redemptions because I do not want to waste any time looking at tax deeds that have been redeemed or withdrawn from the sale. I first compared my Excel list to the properties shown on the Bid4Assets site and removed the withdrawn properties. This reduced the list from 30 to 14.
http://www.rogueinvestor.com/premium/lists/20842sc1.xls


Next, I like to try to find problem. I found two problems right away. Auction ID 484080 is a utility easement and probably has little value.


Property 484075 has an IRS lien as indicated in the spreadsheet and on the Bid4Assets site. This may or may not be a huge problem. Go back to the Bid4Assets site and scroll down until you see the title information. Click on the Title Report link and read through the title report and you will see that it is a mess. In addition to a huge judgment, there's an IRS lien in the amount of $386,135. Ouch! I don't want to mess with that.



This leaves me with a list of 12 potential properties/deeds.
http://www.rogueinvestor.com/premium/lists/20842sc2.xls

Step 3: Screen the list
I see 12 potentials deeds. That's a manageable number so let's take advantage of the fact that the County of Benton has done title work mainly to protect its own interests. First, I typically start doing my research from the back of the list. This is out of habit from lessons learned in large tax lien sales where most of the better deals come toward the end after everyone has exhausted energy and money.

Auction ID 48409
This is a nice property with a deed of trust (mortgage) in the amount of $167, 544 and a credit line (second mortgage) for $5000. It's obvious that the property owners have cashed out because the house (including land) is only worth $173,250. Deeds of trust are similar to mortgages except a trustee (third party) holds the deed. These are private liens and will be wiped out through the tax foreclosure process. Keep an eye on this one. I suspect it will be redeemed by Well Fargo (the lender) before the sale. If not, they stand to loose $167,544.

Auction ID 484087
This is a mobile home that has not been registered properly. It also has State judgments for $547 and $1355. State liens are not extinguished so you would be responsible for paying the debt.


Auction ID 484086
Not too much to be concerned with here. Credit Union debt for $8000 and irrigation costs, but th house is worth $108,870.

Auction ID 484081
This is an interesting property that has surface mining rights and easement to get on and off the property probably for equipment. The house is worth $209330 and includes 4.78 acres. This could be an environmental problem is surface mining has been done. First, we need to know what is being mined, the topography and rainfall amounts and water table level to assess whether acid mine drainage could be a problem. This one may be worthy of having someone do a driveby.

Auction ID 484079
This is an interesting Mobile Home property that is situated on 1.41 acres next to the Yakima River. A deed of trust for 83,137 is present and the property is worh $105,030. A question I have about this property is flood zones and FEMA flood insurance.



Go to Fema.gov and click on map store to find out more information on flooding and flood insurance maps.

Auction ID 484076
Deed of trust for the same amount that the property is worth plus a City lien of $2024 plus a judgment for $10829

Auction ID 484075
IRS lien for $386,135 plus a judgment. This one is ugly. Be careful.

Auction ID 484072
Mobile home not included and 50% mineral rights for 0il and Gas.

Auction ID 484071
Modest home $57470.

Auction ID 484068
This is a crazy shaped lot. Just look at how long the legal description is. You have to be a professional land surveyor to even understand it. If you are considering this lot, I wouldn't certainly put a call into the Assessor's office and ask a lot of questions. Is it buildable, for example?


Auction ID 484064
Homeowners association fees and a deed of trust for $256,500 for a $302,750 house.

Auction ID 484063
State health liens present.


Auction ID 484062
Watch out for state health liens of $2426 and $2594. You will be responsible for paying these government liens.

In summary, be prepared to add the cost of any irrigation fees, city, state, IRS or other public liens. You will not have to worry about deeds of trust or mortgages, they are removed through the tax foreclosure process.

So now what do you think? It's still early, but pick your favorite five and assume 3 of the 5 will be redeemed before the sale.

Now how high do you bid?
First, you study the last year's sale. 2009 Stats are shown at this link:

http://www.co.benton.wa.us/UltimateEditorInclude/UserFiles/Common/Document/2009_Tax_Foreclosure_Sale_Results_12-31-2009_051941.pdf

	Sold	Assessed	Min. Bid	Overbid	% of Value
1	$18,300.00	$35,680.00	$3,526.00	$14,774.00	51.29%
2	$1,600.00	$350.00	$1,118.00	$482.00	457.14%
3	$983.00	$350.00	$983.00	$0.00	280.86%
4	$1,468.00	$4,740.00	$1,368.00	$100.00	30.97%
5	$4,900.00	$23,950.00	$3,041.00	$1,859.00	20.46%
6	$6,300.00	$23,950.00	$3,041.00	$3,259.00	26.30%
7	$5,400.00	$2,790.00	$1,118.00	$4,282.00	193.55%
8	$19,600.00	$30,860.00	$3,350.00	$16,250.00	63.51%
9	$29,200.00	$41,160.00	$4,321.00	$24,879.00	70.94%
10	$3,801.00	$13,000.00	$2,514.00	$1,287.00	29.24%
11	$5,000.00	$2,700.00	$1,103.00	$3,897.00	185.19%
Ave.	$8,777.45	$16,320.91	$2,316.64	$6,460.82	53.78%
Note: one deed was not sold and not included in the averages.

           
As you can see, the results vary from some properties being sold for well below the assessed value to some being sold for much more. Keep in mind, any land more than about 1 acres will often be assessed at a much lower value. So we would need to do more research on the actual values; however, this provides a rough idea of what to expect. It also fits in with my expectations of not paying more than about 50% of a property's value at a tax deed sale.
                
Assignment
1. Go through the current list and prioritize it based upon your expectations of paying 25% and 50% of its current value. Check the county's value with Zillow.com and Trulia.com and see how different they are.
2. Based upon the discussion above, calculate what your true overbid amount would be. Remember if you are considering a property that has a government lien, you have to add that into your costs.

Extra Credit
Go through the 2006, 2007 and 2008 results and see how they compare with 2009.
Results for 2006, 2007 and 2008 linked from http://www.co.benton.wa.us/pView.aspx?id=846&catid=45

Very Best,

Michael