My Experience at the Jackson County, MO Tax Sale Lien Auction


The Jackson County, MO delinquent real estate tax sale auction is held every August, usually the second Monday at the County Circuit Court House in Independence, MO and the third Monday at the County Circuit Court House in downtown Kansas City, MO.

The auction is literally on the steps of the court house, outside in the heat of summer. In Independence there is a roof covering a large outdoor area on the south side of the building where you can sit in some shade. Plan to come at least an hour before the auction begins (the auction will start promptly at 10:00AM) or you will be sitting in the sun (or rain). Bring a comfortable folding chair, an umbrella (sunscreen) and a cooler with plenty to drink and snacks. They will break around noon for a 30 minute lunch and then right back at it. Restrooms are inside the building.

In KCMO, expect a carnival-like, ruckus atmosphere. It is quite a bit less organized (not necessarily the staff's fault) and there are a lot of bystanders and people coming and going who cause distraction. All of this delays the auction.

Expect...

- multiple bidders will re neg on their bids after winning - bid winner will go to the auction table unprepared to pay - there will be shouts and grumbling from bidders who feel their bid was ignored, however, no real effort on their part to be noticed - many lot bids will start over due to the chaos - The Auctioneer will do up 6 or 7+ iterations on a going bid amount, which is not the standard for auctioneering, so he/she can drive up the cost. I believe the auctioneer is getting paid commission based on the amount brought in - which is frustrating

In KCMO arrive before 9:00AM and sit at the top of the court house stairs, otherwise you'll be in the sun (or rain) all day. You'll have a tough time hearing the auctioneer (even with the loud speaker) and you'll stand a chance to get unnoticed when you bid. Just as the Independence auction, bring plenty to drink and snacks (an umbrella and sunscreen). Restrooms are inside the building on the Ground level, however, you'll have to go through airport-like security first to get in - once past security just take the stairs down, it will be quicker than the old elevators (this is a 85 year old building).

General Tax Sale Information: https://www.jacksongov.org/170/2019-Tax-Sale-Property

Registration:

Be sure to register 10 days in advance of the sale, here's the form (from 2019): https://www.16thcircuit.org/Data/Sites/1/media/civil-process/dltregistrationnoticeform.pdf

How to Bid and Pay:

You’ll receive in the mail a card with your bidder number on it, don’t forget to bring it. It’s pretty standard. If you like a property and are serious about buying the lien, after the auctioneer begins the bid raise your card as high as you can to be seen by one of the bid spotters. The spotters will be wearing safety vests so you can’t miss them. Keep your hand up until your limit is met or raise your hand when you hear an amount you are willing to pay. Know your limit!

Payment is due the moment after you bid and win a property, and in fact, the auction will halt until after you pay. The only forms of payment are Cash, Money Order or Cashiers Check. For your security, I wouldn't recommend carrying any amount of cash required to win a bid, however, there were plenty of people carrying bags of cash to pay and there is absolutely no privacy at the payment counter. In fact the auctioneer periodically apologized for the delay because of the cash machine moving slowly. Also, you know when someone is paying with cash because the transaction takes quite a bit longer counting out the cash. Go to your bank, like I did, in advance of the sale and get cashier's checks in increments of $2k to $5k, depending on how much you are planning to spend during the sale. Example payment: If you are the winning bid and you purchase a lien for $4000 and you give the clerk a cashier's check for $5k, they will give you a $1k credit toward any other bid during the sale. If you don't use the credit they will mail you a check in about 10 days for the remaining $1k credit you had on file.

Make Money Orders of Cashier's Checks Payable to "Court Administrator"

The Laws Behind Tax Sales:

Missouri Statutes: http://revisor.mo.gov/main/ViewChapter.aspx?chapter=141

16th Circuit Court Info: https://www.16thcircuit.org/dlt-sale

Plan:

To better plan your day(s) (yes, there can be multiple 10am-5pm days until the entire list is complete), plan about a minute per lot/property. Yes, I calculated how many lots were completed per 30 minutes and it was about 30. So if there are 800 lots listed, plan 800 minutes (13.5 hours) to get through the entire list. This includes those that are skipped because the owner paid their taxes. The sale will end promptly at 5:00PM each day regardless of how many lots are left. There is a 30 minute break for lunch in the middle.

By the time the auction begins there will only be a few prime zip codes left on this list and those liens will go upwards of $20k (the highest this year/2019 was $180k in zip code 64110 near Ward Parkway). Don't expect any cheap or amazing commercial buildings to be available.

I wouldn't come to the Jackson County Tax Sale looking for cheap prime property. The lion's share of the houses on the list are from the urban core, primarily zip code 64130 for the KCMO portion of the sale. You'll find better properties in the Independence auction, however, the price for the liens are driven up by multiple bidders - expect a much higher winning average bid price in the Independence tax sale.

The tax lien list is updated as owners pay off their taxes and many on the list, the day of the sale, will no longer be available and won't be called out.

In general, houses in Jackson County, MO located on the west side of I-435 are auctioned at the county court house in downtown Kansas City, MO. Houses on the east side of I-435 are generally sold at the Independence, MO county court house.

Parking:

At the KCMO sale we parked in the public pay lot just northwest of the court house at 12th and Oak, it was $13 a day. In Independence you'll see a free lot just southeast of the court house at Osage St. & Kansas Ave.

Do your Homework:

We drove by almost 80 properties the weekend before the tax sale and spent most of Fri and Sat and part of Sun doing it. It is imperative that you drive by and check out each home you are interested in before the tax sale (not too soon before the sale because you never know what can happen to the property before the auction: Fire, torn down, vandalism, etc. Do not rely on google maps to view the property or lot. Don't bid on anything you haven't seen yourself - you will be thankful you did this!

Remember, it can be considered trespassing if you go on the property or in the house, and it could also be dangerous. Some of the houses are lived in, so be inconspicuous

Lots going for under $500 are generally just land without structures - but you'll know this because you will have already seen the property you are interested in with your own eyes.

Research:

The auctioneer will call out each lot in numeric order by Case # until he/she reaches the end of the list. For example, here's a case # for a lot that first appeared at auction in 2017: K2017-01123. The auctioneer will read off the entire case # (pay attention to the last 4 numbers) and the legal subdivision and lot boundaries, and the amount of taxes owed (the amount owed could change by the time the auction begins). The address of the property and owner will not be mentioned. The case #'s are in the same order as listed in the newspaper.

Go to the Daily Record Newspaper office (located at 920 Main St #825, Kansas City, MO 64105) and buy a paper that has the tax sale lots listed - this is printed each Friday for four weeks before the tax lien sale. You'll want this paper for the property owner's name so you can do a name search. I could not find the owner's name on the electronic file list.

Here's the Jackson County Website with the electronic list: https://jcgis.jacksongov.org/apps/dlttaxsale/index.html

I printed out this list and sorted by zip code before driving to look at properties. I also marked each property I looked at with a scale of 1-10, one being the best and ten the worst. I am looking for a plotting map so that the drive is more efficient.

The Jackson Count Tax Sale Website information sheet: PDF https://www.jacksongov.org/DocumentCenter/View/85/Buying-Tax-Foreclosure--Property-On-The--Courthouse-Steps-PDF

The site will tell you that you can use their computers to search for judgements and liens, making it seem like that's the only place you can get the info. However, after going to the county court house and using their computer I figured out that it's all on line. Thankfully because the county employees (3rd floor) were not helpful and I felt like I was bothering them. I don't know why they didn't just add these web links to their tax sale site.

Here's the Jackson County Record of Deeds - Real Estate site search: http://aumentumweb.jacksongov.org/RealEstate/SearchEntry.aspx

I selected "Official Public Records" and then from the drop down menu I clicked "Search Real Estate Index"

I found it is easiest to narrow down the search by searching for the owner's name and subdivision first. I tried multiple ways until I found info. I looked for judgments and any type of liens that have not been satisfied. Be sure to search all owners listed in the newspaper for each lot - some will have multiple owners on the deed.

Mortgage owed: Beware

While I was searching I also looked for deeds and dates when the current owned purchased the property so I could do some calculating/estimating when the owner may have paid off their mortgage. If you buy a lien where the owner still has a mortgage you are also responsible for that cost too, if you are planning on acquiring the deed. This is rare it seems, but happens.

Here's the Missouri Court Case.net site for searching federal liens: https://www.courts.mo.gov/casenet/cases/searchCases.do?searchType=name

I searched by first and last name and found it useful to use the middle initial, if available, this helps narrow down the list of people with similar or common names. I looked for the owner’s name and I tried to match the city and address listed on the lot I was interested in. This is a tough search because there is no specific case # you are looking for.

For each I clicked on the case number link (highlighted in blue) and clicked the "Civil Judgement" tab at the top of the screen for any findings and resolutions. There may be multiple pages to search so I had to check at the bottom of the search page for additional pages to view.

I practiced by searching my own name first and I soon became more familiar by playing around on the site.

There is no guarantee you'll find everything you need with each lot and owner, so just be aware of the risk in bidding for tax liens. if you win you will be liable for the amount of the lien for Jackson County and any other amounts owned by liens from the fed, other municipalities, mechanics, individuals and outstanding mortgages.

Once you become the proud owner of a lien (and that's all you realy bought at this point), there is a waiting period (over 20 days) and a court appearance in front of a judge before you are allowed on the property. The clerk will give you an information sheet that tells the next steps in your journey to getting the deed. So don't expect to move in or do any improvement to the property anytime soon. The owner or owner’s family could still come forward and attempt to take the property back (of course you will get your money back plus interest).

When it's all over:

You will need to consult an attorney for legal advise, however, if you plan to sell the property soon after receiving the deed, a title company will not insure the title until you have legally performed a "Quiet Title" suit with judgement - which requires hiring an attorney. Plan to spend around $1500 for a quiet title and a wait of 3-6 months. If you find it any cheaper please let me know. I personally wouldn't do any improvements without first acquiring a quiet title for fear of the last owner taking the property back.

Final thoughts:

This was my experience at the 2019 Jackson County Tax Lien Sale. We got to the KCMO sale at 10:00AM the first day, August 19th due to issues waiting for the bank to print cashiers checks. As I mentioned above, don't wait until the day of the auction and expect your bank to come through for you and process anything quick, plan ahead. We had to sit in the hot 95 degree sun until around noon when the sun went behind the building (and this was at the foot of the stairs, any further back and you will be in the sun all day). The sun came back over the top of the building at about 4:30PM. The next day we got there just before 9:00AM and found a great position at the top of the stairs in front of the auction tent. It was still really hot and humid but doable.

I can't say this experience was good, bad, productive or beneficial for what we wanted to achieve. We did pick up one lien for a trashed, vacant 4plex that we plan to rehab and rent, however, it will be a long while before any cash flow comes from it. It was fun listening to all of the side stories people had over property they were looking at and why they wanted it. And we met some really nice people around us. There were a few shouting matches and the auctioneer became agitated and testy toward the end of each day, but overall this tax sale was sort of what you'd expect as your day progresses while at a public event - a carnival but without the rides.

Hope this helps you if you plan to attend the tax sale next year. If you have any questions or thoughts please email me at jwoods@wootinvestments.com or leave a message below in the comments.

John Woods

#taxsale #taxlien #taxauction #realestateauction #jacksoncountytaxsale

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