When looking to buy a new home, most people hire a real estate agent and look for homes listed on the market. But purchasing a home at market value can be expensive, and let’s be honest – we all love a good deal.
What most people don’t realize is that there are other ways you can find homes. Public tenders and auctions open you up to a whole other option of Ontario Tax Sales. But what is Ontario Tax Sale, and how can they save you money? Let’s take a look.
What is Ontario Tax Sale?
When property taxes are left unpaid for a certain period of time, taxing authorities have the right to seize and sell the property. The municipality or taxing authority sells the property in an attempt to recover any unpaid property taxes. This is called an Ontario Tax Sale. And when these types of sales happen, properties generally sell for much under market value.
Why do they sell so cheap? Because it isn’t the goal of the municipality or courts to obtain market value on the property or home. Instead, it’s simply their goal to recoup lost revenue, interest, and penalties. These things generally add up to much less than the home’s market value, allowing the property to sell for significantly less than what it’s actually worth.
How do you buy an Ontario Tax Sale?
There are two different ways that Ontario Tax Sales are conducted; through auction and public tender. To clarify the difference, an auction is a type of sale in which buyers compete for assets by placing bids. The highest bid wins the auction.
Public tenders are sealed written documents that are submitted directly to the seller. Again, the highest bid will win, but unlike at auctions where you know how much competitors are bidding, tender offers are private.
In most cases, Ontario Tax Sales are made through public tenders.
Regardless of how the bids are placed, a minimum bid is always required through auction or tender. This minimum bid is equivalent to the outstanding fees left on the property, plus any interest or administrative fees incurred. For example, if there is $50, 000 owing on a property, the minimum bid you can place is $50 000.
Does this mean that you can own a property for $50 000 or less? Technically, yes. If no one else were to bid on the property, you would win it at a minimum bid. But most people bid higher in hopes of raising their chances of winning. Remember, the highest bid wins, so there is no telling how much the property will actually sell for.
Where can I find upcoming Ontario Tax Sales?
If you want to know more about Ontario Tax Sales, visit OntarioTaxSales.ca. This website has everything you need to know about upcoming tax sales across Ontario.
You can find excellent deals on properties through Tax Sales, but you have to be diligent if you want to find one. Remember, you are competing against other buyers, so there’s a chance you will not win a property even if you place a reasonable bid. Keep your head high and bid on the next one!