Buffalo Rising Online

I am interested in learning more about the "In Rem" process. I know that there are seriously knowledgeable readers on BRO and I am serious about learning more. Specifically:

- What are the liabilities associated with these properties, beyond "as-is" condition? Is the purchaser responsible for paying back taxes, liens, and obligations? If so, to what extent?

- Are these properties available for inspection?

- If you purchase a house as an investment, can you purchase the adjacent vacant properties from the city, or is that reserved for owner-occupied structures?

- Is this a good way, for the relatively new property owner, to purchase investment properties? Or is this akin to a City sponsored Ebay listing?

- What advice do you have for a first time investor?

All back taxes, liens, water bills, etc., are completely wiped out after purchase at city auction. You start fresh, with the exception of any outstanding housing court violations.

The properties are not available for inspection beyond what you see from the street. Generally, you get what you pay for. Most of the properties have a ton of problems.

The city uses all back taxes owed on the property minus housing court violations as the price for the house at auction. If they owe say $5,000 in back fees then this is the starting bid for the property. This enables the city to make back the money that is owed to them. On top of this these properties are considered "as-is". Beyond not being warranted, the property cannot take advantage of many of the programs through the city. For example, Belmont shelter and neighborhood housing services replacing your roof, porch hot water tanks, furnaces and such. beside Their are still programs I believe you can qualify for with an "as-is" property, such as 50-50 loans. I think it can be a great way to invest for the first timer or a veteran. But many of the properties that are listed are homes that have been either vacant for a while, burned, or are in deplorable shape. If you going to invest look at properties that are in good areas. You can find homes that the only reason they are on the auction block may be they owe $2,000 in back taxes. I would suggest calling the inrem foreclosure office and talk to the people down there. Find properties you like, drive by them and take a look, then call down the their office and they will tell you why the house is up for auction and how much is owed. I hope this helps.

How exactly do these auctions work. If the house is assessed at 44k, where is the starting price for the auction?

The list began with over 4000 properties on and it will be down to about 1500-2000 come October. Last year only about 900 properties sold and most went worth 44k. Many of the listings are vacant lots

I do not believe Jolopy is correct (sorry J.) in saying that the starting bid is the amount of the lein (i.e. back taxes, water bill, etc.). The auction I attended had many properties start (and sell) at much less than the amount that was owed on them. The City can set a minimum sale price and elect to keep the house if that is not met, but the money owed on the property does not necessarily determine the bid or sale price.

Another thing to consider is that if someone is living in the house it is your (the new owner's) responsibility to remove them from the premises through (if necessary) an eviction, but you can't actually do that until you have a title to the property, so there is an interim period during which you have essentially signed a purchase agreement, but do not yet own the property during which the former owner and/or tenant will still be able to live in the house.

Any housing attorneys or veteran flippers feel free to weigh in, but that was my experience.

Also remember as sambo says, that many of the properties now on the in-rem list will be "redeemed", i.e. have the lien on them paid off by the owner in the weeks, days, hours, or minutes, before the auction takes place.

A couple of other points -

IRS and State Tax Liens generally survive the in rem auctions.

As a new owner, you're liable for the water bill from the date of the sale. You have no right to turn off the water until you have title.

Aside from a potential eviction, former owners can strip a property legally before you take title.

Filing the deed can take 3-6 months and the waiting period is during the winter.

If you get sued, you have to pay your own attorney.