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Washington County tax auction set for Tuesday

June 02, 2013|By KAUSTUV BASU | kaustuv.basu@herald-mail.com

Hundreds of Washington County properties will go on the auction block Tuesday because of unpaid taxes.

A total of 535 properties on which taxes have not been paid were listed in a newspaper advertisement May 11, but that list had been pared to 320 by Friday afternoon, according to the Washington County Treasurer’s Office.

The initial list tends to steadily decline as the day of the auction nears, Washington County Treasurer Todd L. Hershey said.

“We hope to get the figure down to less than 300 every year” by the time of the auction, he said.

“All the county is interested in doing is collecting the real estate property tax. So we put them up for auction to the highest bidder,” said Hershey, whose office handles about 56,000 real estate tax accounts in the county.

The opening bid for a property is the amount of county, state and municipal taxes that are owed on a property, as well as “certain water and sewer obligations, and other municipal lien amounts. The figure also includes a total of $418 in legal, advertising, auctioneering and county penalty fees,” Hershey said.

The most expensive property on the list as of Friday is at 28 S. Potomac St. in Hagerstown. The property has an assessed value of $2.5 million, with an opening bid of $11,564.98.

That account was still due as of Friday, according to the treasurer’s office.

The property listing with the lowest assessed value on the list as of Friday was a lot on North Street in Maugansville with an assessed value of $2,700 and an opening bid of $559.96.

Some properties on the tax sale list this year have opening bids that are higher than the assessed value of the property.

That’s because liens are placed on certain properties by municipalities to recover fees related to code violations and demolitions, Hershey said.

Every year, about 75 people register to bid for the properties, but only about 5 percent of the properties on the final list actually change hands.

“A majority of the properties go to three or four major bidders,” Hershey said. “There is some risk involved, but there is potential for reward as well. ... You don’t have the option to inspect the property prior to placing a bid on the property.

“The reward is that with some work and a little luck, you can purchase a property at prices far below the assessed value,” he said.

The numbers on the initial list this year and in 2011 were lower than in 2010, when 672 properties were listed in the newspaper advertisement.

A total of 625 properties showed up in the initial newspaper advertisement in 2012, while the number was 535 this year.

“So that may be a sign of an improving economy,” Hershey said.

The auction Tuesday is the beginning of the process of a property transfer. By purchasing a property at the tax sale, a bidder receives an option to foreclose on the property in the future.

The highest bidder for a property receives a certificate of sale and has the right to foreclose on the property if the original owner does not pay the money owed within six months of the sale.

“Purchasers cannot begin the process (filing the action in circuit court) until six months from the date of the sale,” Hershey said.

In those six months, the original property owners have a chance to reclaim the property “at any time until the right of redemption has been finally foreclosed through a circuit court proceeding,” according to Hershey.

Those who want to reclaim their property have to pay any taxes, interest and penalties paid by the holder of the certificate of sale, along with accrued taxes, interest and related legal fees.

Hershey said he likes to see local participants at the real estate auction.

“We want people from this area to be purchasing these properties. We think they are probably more inclined to maintain the character of the neighborhood, have the pride of ownership,” he said.

The auction begins Tuesday at 9 a.m. at the rear of the Washington County office building at 35 W. Washington St.

The deadline to register to bid at the auction is 4 p.m. Monday. Those wishing to bid on properties can register at the Washington County Treasurer’s Office, 35 W. Washington St., Suite 102.

The last opportunity to pay the back taxes is 4:30 p.m. Monday.

If you go ...

What: Washington County tax auction
When: Tuesday, June 4, 9 a.m.
Where: Rear of Washington County office building, 35 W. Washington St., Hagerstown. Those wishing to bid must register at the Washington County Treasurer’s Office at 35 W. Washington St., Suite 102, by Monday at 4 p.m.

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