Random Bid Tax Sale
February 23, 2009
Random Bid Tax Sale
I really don’t understand why a jurisdiction would choose a random bid process for selling tax liens. First, bidders cannot pick and choose which properties to buy because they may only have 1 chance to bid if your number is only called once. Second, it does not allow the purchasers a chance to do their due diligence on the properties. They would have to drive by every property being sold so that they know what they may have the chance to bid on at the tax sale. Third it does not create any additional revenue for the jurisdiction because the tax liens do not get bid up.
It really is a lose/lose bidding process. The only real benefit for the purchaser is that the can buy the lien at face value and do not have to pay a premium. But the costs far out way the benefits of random bid process at tax sales.