The Maryland Tax Sales Are Going on Now!
Did you know that the redemption period in Maryland is only 6 months? Maryland tax sales take place in May each year, and some of the counties that have online sales have already closed registration for their online auctions. But a few have just opened up for registration and a couple will open for registration soon.
The state of Maryland has a unique bidding procedure for tax liens. Premium is bid at the auction, but you don’t pay all the premium at the tax sale. Most of the counties collect what is referred to as “high bid premium” in addition to the lien amount, immediately after the tax sale. The investor does not pay the entire premium amount unless the lien does not redeem. The entire bid amount must be paid in order to get the deed to the property after a tax lien foreclosure.
What is High Bid Premium?
High bid premium is actually a very small amount of what is bid. If the winning bid is less than 40% of the assessed value of the property, no high bid premium is paid at at the sale. The entire premium only needs to be paid if the lien is foreclosed.
High bid premium is calculated as 20% of the difference between the bid amount and 40% of the assessed value of the property. Here’s an example: If the property is assessed at $100,000 and you bid a $50,000 premium at the tax sale, you owe the amount of the lien + $2,000 (20% of $10,000). But if you bid $40,000, or anything less than that, you don’t pay any premium at all at the tax sale, just the amount of the lien. You do have to come with that $40,000 (or whatever premium you bid), however, if you foreclose on the property. If you’re still a little confused about high bid premium, you can find a more thorough explanation in this article: https://taxlieninvestingtips.com/2011/03/30/questions-about-maryland-tax-sales.
High bid premium is not the only unusual aspect of bidding at the Maryland online tax sales. Some of the counties that have online tax sales don’t actually have live online bidding. Instead you have to register online for the tax sale and then submit your bids to the county on the day of the tax sale, either by mail, fax, e-mail, or digital upload – depending on the county. It’s very important to register early for the tax sale, as some counties have deadlines for registration well ahead of the day of the sale. And since bidding procedures are different in the different counties, you need to read the terms and rules for the sale carefully, so that you get your bids in on time.
Another Unusual thing about Maryland tax sales is that the interest rate varies by county. There can be a big difference in the interest rate from one county to another. Just to give you an idea of what a big difference there is from one county to another; Frederick county has an annualized interest rate of 8% and Prince George’s County has an annualized interest rate of 20%. Most of the other counties have rates of either 12% or 18% per annum.
We now have a specific done with you training just for the Maryland Online Tax Lien Sales. It consists of 4 modules with video and audio training and links to resources and checklists. Find out more about the Done With You training for Maryland at https://taxlienlady.com/Maryland.
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