Auction attracts risk takers

Bidders seek profit, property during

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If you haven't paid your taxes, the attendees at the county's annual tax lien sale might pay them for you. But they'll expect something in return.

About two dozen people gathered at the Routt County Courthouse Annex on Thursday morning looking for a return on their investments. There were 158 tax liens up for auction this year and about 25 bidders.

"A lot of people think their property is being sold at auction, but it's not," said Routt County Treasurer Jeanne Whiddon, who is tasked with overseeing the auctions.

Rather, the bidders purchased tax liens against the properties with the hope of eventually collecting interest. However, if the owner of the property does not buy back the tax lien in three years, the bidder can secure a deed for the property.

"The goal is to make money or maybe pick up a property," said J. Hoffman, a Realtor and a regular at the annual tax lien sale.

Obtaining a deed to the property after the three-year period is rare, he said.

"Maybe one-half of 1 percent," Hoffman said.

The amount of unpaid taxes on each of the properties at the auction ranged from tens of dollars to tens of thousands of dollars. The starting bid for each property was the amount of taxes and penalties owed. Anything bid above that amount - the premium - goes directly into the county's general fund. This year's auction raised about $10,000 in premiums.

The return on the bidder's investment most often occurs when the owner buys back the lien. The owner pays 15 percent interest to whoever holds the lien on the property.

The lien holders are guaranteed to receive a minimum of one month's interest. Interest is not paid on the premium amount, which presents an element of risk. Still, most of the people bidding thought it was worth the risk.

"The interest is the main thing, because it is 15 percent," said Tony Stich, a Stagecoach resident. "It's a good return on your money."

Stich said this was the first tax lien sale he had been to, and he spent about $5,000 to buy liens on nine properties.

"There is definitely some risk, and definitely a couple properties that I wouldn't bid on," Stich said.

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