This is the second Part on government real estate auctions. To read the first part of this article, go to government property auctions.
Although all of these auctions have provided some really juicy bargains in the past to property speculators (or even first time buyers), the real value can be found with government real estate auctions facilitated by the Treasury department, IRS and US Marshalls’ office.
Treasury Department
The Treasury Department manages the Seized Real property auctions. This is generally real estate which has been seized through an Internal Revenue Service Criminal Investigation, enforcement by the immigration and customs divisions as well as the United States Secret Service.
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Registering for these auctions is dead easy, as it require the bidder to simply complete a standard registration form with information such as date of birth, address, etc. You need to have these forms handy on the day of the auction.
Interested bidders can be notified in advance of future auctions and the Treasury department actively encourages bidders to inspect the property beforehand at an appropriate date. As with almost all auctions, the real estate is sold with all faults and no guarantee or warranty accompanies the property. Therefore make sure to do a thorough inspection of the property before you decide to submit a bid.
Not able to attend?
The Treasury Department also has the facility to accommodate bidders who cannot attend the live public auction. You can submit a written bid. The highest written bid will be in effect the opening price at the live auction. If there are no greater bids than this opening bid, the sealed bid would have effectively won. These real estate auctions are recognized for its ability to yield great deals for buyers.
US Marshall’s Office
Similar to the Treasury Department, the United States Marshall Service has an Asset forfeiture program, which they manage on behalf of the Department of Justice. A government auction of this nature is conducted in very much the same way as the Treasury department. The only real difference is relating to the origin of the properties. These relate to properties forfeited by the USMarshall office, the United States Attorney Offices, FBI, DEA, the Department of Homeland Security and ATF.
Quite often these assets were confiscated from criminals. The government were not owned any money, so therefore time and time again the bidding on these pieces of real estate can start (and end!!) very low. The Marshall office either conducts these auctions by themselves, or contracts the services to private auctioneers.
IRS
Very simply the Internal Revenue Service has the ability to confiscate any property from taxpayers that are behind or simply didn’t pay their taxes. The property at these government real estate auctions has produced great deals for speculators in the past, but they do come with some strings attached.
The IRS does things a little differently in the sense that there may be some outstanding liens or claim on the property by other banks and creditors. Be sure to therefore do your homework on this and triple check that the title is clean. Furthermore there is a period of six months that the IRS allow the taxpayers to repay his/her taxes as well as interest to the bidder and effectively reclaim (redeem) his property – very important to bear in mind. The IRS also does not accommodate any finance from lenders. It has to be done all in cash.
Buying seized property at government auctions is therefore both a popular and proven way for investors to buy real estate at a large discount to its fair market value.
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