By Staff
Bids don’t completely
cover all expenditures
tied to tax foreclosures
By GREG KATSKI
Staff Writer
WILLAMSTON — Revenue raised by auctioning real-estate properties on which taxes had not been paid didn’t completely cover Martin County’s cost of putting those properties up for bids.
A real-estate foreclosure auction was conducted Tuesday at the Martin County Farmers’ Market to benefit Martin County, with the help of auctioneer and real-estate broker Bill Forbes with Bill Forbes &Associates.
Approximately 50 registered bidders — 100 bidders in all — attended the auction, offering a combined $141,950 in high bids for 31 properties. The highest bid for each property was accepted by the Martin County Board of Commissioners at its regular April meeting Wednesday night.
During the meeting, Martin County Manager Russell Overman called the auction “a tremendous success.”
The net income (bids minus auction-related expenses) from the auction was $134,371.12.
Of the net income, $70,183.31 will be applied to foreclosure-related expenses and $64,187.81 will be used to pay some of the property taxes or fire taxes owed to the county, towns and fire districts by previous owners of the properties.
The total cost to auction the real estate for the county came to $180,035.57. Overdue property taxes on those properties and attorneys’ fees associated with foreclosing on those properties accounted for the majority of that cost. The county came up almost $40,000 short in covering its expenses, but it could have lost much more had the properties not been auctioned, officials said.
The process of tax foreclosures on houses in Martin County started in 2003, taking three years to implement, according to Commissioner Mort Hurst.
Because the county cannot do a forced collection of overdue property taxes after those taxes go unpaid for 10 years, the county was losing money by not foreclosing on houses on which property taxes had not been paid, he said.
Considering such a tax increase unjust to county taxpayers, Hurst, Commissioner “Butch” Lilley and former Commissioner Tom Bowen formed a coalition to push for real-estate foreclosures by the county.
They brought legislation before the board, and it was approved.
After that legislation was approved, a foreclosure auction that followed state law was conducted, but limitations in that law provided little relief to the county, officials said.
Bids did not exceed the accumulation in county taxes on the foreclosed properties, and the county was forced to repossess the properties.
Forbes explained that foreclosure auctions conducted in accordance with state law are “basically to see what properties are worth.”
Following Forbes’ advice, the county conducted an auction with round-robin bidding. Round-robin bidding consists of two rounds, with the first round designed to give a feel for how much bidders are willing to spend.
The first round of bidding ended with $93,000 in bids. The second round ended with $141,950 in bids, with bids for 28 of the 37 overall properties on the auction block increasing from the first round to the second round.
Commissioner Al Perry attended the auction.
After the meeting, Overman said the county will conduct more auctions.