Hoping to get a deal
May 23, 2008
Hoping to get a deal
Article Launched: 05/19/2008 01:00:00 AM EDT
NORWALK – As the city’s July tax sale draws near, posters listing the properties for auction are drawing interest from visitors to City Hall.
They have been crowding around the photos since the posters were set up in the lobby last week, said Stephanie Bookhardt, who runs the City Hall newsstand and snack counter nearby. People are looking for a deal or to spot a property or an owner they knew.
“Unbelievable,” marveled one man.
“Depressing,” murmured another.
“Embarrassing,” a woman said.
Of the 200 properties slated for the sale, owners of all but 79 have paid in full, recouping $2.68 million in back taxes. Nearly $250,000 was collected last week alone, Tax Collector Lisa Biagiarelli said.
Her office wants to bring in about $4.3 million in outstanding taxes through the sale, which targeted properties owing $12,000 or more, or those that were at least three years late in back taxes. Sixty percent to 70 percent of owners named in a tax sale typically make good on their back taxes, leaving 20 to 30 properties that go to auction, Biagiarelli said.
In a tax sale, properties are auctioned at a minimum bid in the amount the city is owed, but auction winners do not automatically own the property and the city does not make a profit.
The landowner or lien holder has six months to redeem the property by paying the taxes due, plus 1.5 percent per month on the total sale price, which goes to the bidder along with the original auction investment.
Over-bids are held in an account and given back to the bidder if the property is redeemed. Otherwise, the auction winner receives the deed for the bid price and the over-bid is turned over to the state Superior Court, where the former property owner or lien holder can file for the money.From her perch close to the posters, Bookhardt is asked a lot of questions about the tax sale and properties. She directs people to read the packets explaining the sale, which the tax collector’s office sells for $15 each.
“I tell them, ‘You better read that book over there.’ You know there’s always a catch to it,” Bookhardt said. “You have to look into it and read the fine print, but some people get lucky.”
The tax collectors’ office has sold about 40 packets. Since bidders must put down a $5,000 deposit on each property they wish to bid on, it’s a good idea to do the research, said Cynthia Haith, the city’s delinquent tax collector.
Ed Manfreda, the owner of several properties, bought a packet after seeing the posters in the lobby and agreed that research is important.
“I learned that the hard way. The first place I bought I should have looked into it a little better, because it was not what I thought,” he said.
Gary Pfister stopped to check out the posters, became intrigued, then called his sister to tell her about the properties.
“I’ve heard of foreclosures before, but not tax sales,” Pfister said. “You could probably get plenty of good deals if you do the research.”
You can also get a bad deal if you don’t, Haith said. She has seen bidders’ joy over winning a property turn to panic.
In the last tax sale in 2005, one woman – now known around the tax collectors’ office as the “Price is Right lady” – jumped up and down and ran screaming down the aisle of the Concert Hall when she won a small strip of property she mistakenly thought included a home.
Instead of searching the specifications, the woman just drove by the address. When she realized her mistake the next day, she wanted her deposit back, but it was too late.
“If she would have gotten a map, she would have figured out it was a small piece of property. You couldn’t even build a doghouse on it,” Haith said. “She did her research a day too late.”
Haith has seen bidders get good deals. In a strategic move, a woman nabbed the property next door to her home in the 2003 tax sale, she said.
City employees on their lunch breaks also peruse the properties.
City Clerk Mary Roman said 21 Point Road, where the owner owes more than $29,000 in back taxes, is her “dream house.” The three-bathroom Mediterranean-style home is assessed at $2.65 million, and Roman joked about pooling friends to buy it.
It’s not only owners of private homes who owe back taxes and sewer assessments. Others on the list include a car wash, a former school, a synagogue, a church, a boat locker at the private Rowayton Yacht Club on Bluff Avenue and the city transfer station owned by the quasi-public Connecticut Resources Recovery Authority.
The properties often come with a past – and sometimes a lawsuit, real estate attorney Michael Witherspoon said. He did title searches for the city so Biagiarelli’s office can notify lien holders about the sale.
“If you plan on buying at the tax sale in July, plan on having a title search done,” Witherspoon said. “You could be buying a lawsuit, they could owe the IRS, this bank or that guy.”
Prospective buyers may look up information in the tax assessor’s office, pay for private title searches or conduct one themselves in the town clerk’s office.
Whether bidders nab a good deal or bid on a dud, the sale is interesting, Haith said. People who don’t bid attend to watch the drama unfold.
“Even if you’re not going to bid, it’s very interesting to attend,” Haith said.