Robert Ray had barely pulled into the driveway before he saw eyes, wide with fear, peering through the blinds.
“All I could see were the whites of her eyes,” Ray recalled of the “little old lady” who was about to lose her house.
Ray was there to deliver somber news: He had paid her taxes in a delinquent-tax sale, and he soon could own her home.
“Those eyes were big as 10 eggs,” Ray said, pausing for a moment.
Ray didn”t even make it out of the car. He put his car in reverse and backed out of the driveway.
“I couldn”t do it,” he said. “I turned around and left. I lost $500 instead of taking her house.”
Ray, a retired government auditor who lives in Columbus, is a frequenter of delinquent-tax sales and has been since 2002.
The stories are endless, he said. So are the misconceptions.
“Everybody thinks this is a deal where you get this lucrative, expensive property for nothing, and that just don”t happen,” Ray said.
Monday morning, more than a hundred people will file into seats at the Trotter Convention Center in Columbus to “bid” on properties whose owners are a year or more behind on paying their property taxes. Really, the bidders will just be paying the delinquent taxes on somewhat random properties, as their number is called. Ray will be among them.
The closest he”s come to taking ownership of a “lucrative property” was paying the taxes on a $130,000 condo in Starkville.
He and his wife, Mary Jo, drove to Starkville to look at the condo. It was certainly worth the investment.
But it wasn”t long before he got a call from a lawyer, representing Citibank. Though the condo owner had financed it with Merchants and Farmers Bank, Citi Bank had bought the loan, and the owner was making his payments, property tax included, to Citibank in New York. Due to a chancery clerk error, Citibank never got the tax bill, so Ray”s tax deed was void.
The Rays settled with Citibank. “And we did not get our $130,000 condo,” Ray said.
Actually, Ray gets very little property through the sale. Mostly, he makes his money on interest.
Earning interest, avoiding a headache
Those who bid to pay the delinquent taxes earn 1.5 percent in interest, 18 percent annually. The owner of the property has up to two years to pay the taxes, plus interest, before the tax-sale buyer can claim the property for himself.
“Ninety-eight to 99 percent are paid off within the two-year period,” said Greg Andrews, tax assessor/collector for Lowndes County.
“I”m in it mostly for the interest,” Ray said. “When you get the properties, what you get mostly is a headache.”
“You have stuff that matures after the two-year period, and nobody wants it after the two years,” Andrews said. Those properties revert back to ownership by the office of the secretary of state.
“When you do acquire property, mostly it”s something that”s been abandoned,” Ray said.
To acquire the property after the two-year waiting period, the person who paid the delinquent taxes must apply for a tax deed with the chancery clerk, paying a hundred dollars and two years of taxes. And it could take several months to get a tax deed.
“You just go deeper in the hole,” Ray said. “I”m very glad to get my interest. Don”t give me that piece of property that”s run down.”
Ray has acquired two rental properties in Monroe County through a tax sale; they had been abandoned, and he fixed them up.
Hundreds of properties listed
More than 1,600 properties are listed on the delinquent-tax roll in Lowndes County, down from about 2,272 when Lowndes County Tax Assessor/Collector Greg Andrews began advertising the delinquent-tax sale on Aug. 18.
As of Thursday afternoon, 108 buyers had pre-registered for the sale. They”ll each get a number — on a first-come, first-serve basis — and tax officials will go down the list of properties and buyers, in order, offering each a chance to pay the delinquent taxes.
Andrews could only recall one instance in the past several years where a buyer offered to pay more than the amount of taxes owed. Any overage is retained by the county, and the buyer only recoups that money if the interest makes up for the overage.
Of those more than 1,600 properties, Andrews estimates only five will actually end up transferred to new owners as a result of the tax sale.
And, he admits, some of the properties listed would be of no use to the buyers anyway — curbs, gutters, right-of-ways.
There also are commercial and residential properties listed, as well as agricultural land and empty lots.
“The majority of them are going to redeem them before that two years is up,” he said.
Win some, lose some
So, in general, the owners will keep their property, the municipalities, county and school districts will get their taxes, and the tax-sale buyer will get his interest. (Exceptions are bankrupt properties, such as the Columbus Country Club, which owes $42,979. They are exempt from the delinquent-tax sale.)
In other instances, the buyer will get stuck with unwanted property and take a hit of a few-hundred dollars rather than keep it.
Ray has been there.
Once, he ended up with an abandoned longtime family home. The original owners died; their children moved away. One child kept paying the taxes for several years. But with no help from the other children, the property-tax payments eventually stopped.
“After two years, I”m the proud owner of this falling-in place that you can”t give away,” Ray said.
Andrews can only recall two instances in the past 10-12 years where people lost homes of significant value due to the tax sale.
A homeowner in New Hope Park lost a $124,970 home over $1,438 in delinquent taxes, and a homeowner in Oakdale Park lost a $108,450 home over $664.91.
Top Five Delinquent Properties Listed in Tax Sale
1. Castle Columbus: $141,587
Walmart and out-parcels
2. Mikey Hospitality: $92,833
3. S.L. Sethi: $37,214
River Chase Inn (formerly the Hampton Inn)
4. Don DePriest: $34,972
5. Fox Run Apartments: $24,059