There are numerous ways to become an owner of Pennsylvania real estate. Maybe you inherited farmland from your grandparents, or perhaps you went the more traditional route of securing a mortgage in conjunction with your spouse.
Some people, including real estate investors, are eager to learn more about alternative means of acquiring real property. The annual Upset Sale for real estate in your county could be a source of surprising real estate bargains.
You can potentially buy real estate for a fraction of its fair market value by covering the past-due taxes and certain other expenses at an Upset Sale. Here are a few things that property buyers in Pennsylvania need to know about Upset Sales and home ownership.
It takes a while to complete a transfer
If you go to an Upset Sale and make a bid on a property, it would likely be a mistake to attempt to gain possession of the property and start moving in as soon as possible. The reason is simple. The original owner who has the tax debt technically has an opportunity for redemption. You may have to wait up to nine months after the tax sale to become the official owner. If the previous owner redeems the property, you will no longer be the owner.
Redeemed properties can be a source of income
The idea of undertaking the effort to research properties and make a purchase at an Upset Sale may seem both time-consuming and potentially frustrating given the right of the owner to redeem the property after the sale. However, you have a right to compensation for your investment of time and effort. The law typically allows you to claim 10% interest on the amount that you paid at the Upset Sale in the event of a redemption.
You need capital on hand for an Upset Sale
Mortgage lenders will typically not underwrite a loan for a property that you won’t hold clear title to, as is the case in an Upset Sale purchase. You will typically need to have liquid capital on hand to complete an Upset Sale transaction. The purchase amount is due in full by the next day.
Exploring all the different means of becoming a real estate owner in Pennsylvania can help you determine if attending an Upset Sale might be a worthwhile endeavor.