NEW ORLEANS – (RealEstateRama) — On June 1, the City of New Orleans held its monthly online auction for adjudicated properties, which brought in more than $184,500 after 28 individuals bid on the 18 properties that were for sale. Fifteen bidders won 18 auctions with nine going into extended bidding. A total of 660 bids were placed with the highest priced auction at $31,061. Winning bidders received full ownership and title insurance for each property. The next auction is scheduled for Wednesday, July 6, 2016.
The City reminds residents that there are more than 900 properties still available for deposit to begin the research and notification processes before an auction may be scheduled. A list of these properties, as well as the list of properties in the July 6 auction, is available at CivicSource.com external link, which is also where the online auctions will take place.
A property is adjudicated to the City when its property taxes have not been paid – becoming delinquent – and the City is unable to sell the property at a tax sale. The City will only auction properties where five years have elapsed from the tax sale certificate filing date. Any interested party may bid on a property in the auction, whether or not they placed the initial deposit on the property (depositors who lose at auction will have their deposit refunded within a few days). There are still more than 900 properties awaiting deposits and research.
All owners of adjudicated properties scheduled for auction have received multiple notices of taxes owed with a legally-mandated 60-day repayment grace period, including first-class and certified notices of sales.
Once a property is successfully auctioned and then sold, all adjudicated property owners, as well as those who have a recorded interest in a delinquent property, will forfeit all rights to the property. The number of properties available for auction in June could change as delinquent property owners pay the taxes and fees due.
First Deputy Mayor and Chief Administrative Officer Andy Kopplin said, “The sale of all 18 properties is more evidence of the energy and excitement in the revitalization of New Orleans. We look forward to continuing these monthly auctions until the City has exhausted its backlog of adjudicated properties. We still have hundreds of properties awaiting deposits across the city, so I encourage residents to visit CivicSource.com external link. All it takes is one depositor to start the research and notification processes so that we may schedule the property for auction.”
As properties clear the research and notification processes – and after they have been certified for insurability – they are scheduled for auction on a monthly basis.
The minimum bidding price will include the cost of the research and legal notifications, closing costs and the cost of the title insurance, which can range from $3,000 to $7,000 depending on the property. Unlike tax sales, the successful purchaser at an adjudicated property auction will own the property free and clear with title insurance underwritten by WFG National Title Insurance Company.
The City will hold the online auctions for adjudicated properties on the first Wednesday of every month, from 8 a.m. to 8 p.m., subject to a rolling close in the case of last-minute competitive bidding.
A key goal of the adjudicated property auction is to provide title insurance to the winning bidder through WFG National Title Insurance Company. In order to undertake the legal research to be able to offer an Owner’s Title Insurance Policy, each property has undergone a two-step process:
STEP ONE: THE PRE-SALE RESEARCH & NOTICE PROCESS
When an investor chooses to initiate the auction process on one or more properties, he or she will place a deposit of $650 on each property, which starts the prerequisite legal research and notification process that is required before the auction takes place. The pre-sale process takes approximately 120 days to complete. If the current property owner pays all delinquent taxes and fees during the pre-sale period, the depositor is refunded the deposit and the sale is halted.
STEP TWO: THE AUCTION
If the property is not redeemed by the conclusion of the research and notification period, a WFG National Title Insurance Company authorized agent reviews the file for total compliance with WFG’s prescribed underwriting guidelines. Properties that do not meet the guidelines remain in the research and notification processing stage until it is deemed either insurable or uninsurable within those guidelines. In the case of the latter, the property is excluded and the depositor is refunded; for properties that meet the guidelines, the auction date is set and the depositors are notified. When the auction goes live, the depositors and other interested parties place their bids and a regular online auction takes place (bidders do not have to place a deposit in order to bid, but a deposit is required to initiate the research and notification process that must occur before an auction can take place). The minimum starting price for each property includes the cost of the research and legal notifications, closing costs and the cost of the title insurance. Unlike online tax sales, the successful purchaser will own the property free and clear with title insurance guaranteed through WFG National Title Insurance Company. Losing depositors will be refunded their $650 deposit within a few days.
Questions about delinquent taxes and the adjudicated property sale process should be directed to Department of Finance’s Bureau of Treasury by calling toll free 1-888-387-8027.