Buying Buildings and Houses
and some tips for living rent free
There are several relatively common methods to find a cheap place to house yourself, your belongings, and/or your project. Besides finding a place with low rent, which in itself can be easy or hard, depending on what neighborhood you are looking in, there are several options that different folks have found successful.
Finding A Property & Finding Out Information About That Property
The best place to find contact information for vacant properties, when there is no published contact information or you are unsure of the owner/status of the property is by contacting the Allegheny County Assessment Office. This is basically the department of county government that is responsible for assessing the value of and collecting taxes on every property in Allegheny county, so of course they have the most thorough records! If you go to their office, they have computers there to look up properties by address, by owner, and several other methods including block-lot numbers, which are the “addresses” for every lot in the city, even vacant land. Through the assessment office you can also get copies of these block-lot maps for the neighborhood you are interested in, printed off microfilm for a few dollars. These are also useful for figuring out what the boundaries of different properties are and what vacant land belongs to which property. If you have a computer, a very useful tool in searching for properties is their internet property search engine that can be used from home, located at: http://www2.county.allegheny.pa.us/realestate/search.asp
Allegheny County Assessment
County Office Building 542 Forbes Avenue, Third Floor
Pittsburgh, PA 15219(412) 350-4600
(M-F, 8:30 a.m.-4:30 p.m.)
So, how do you get to use any of these empty properties?
OPTION 1: WORK TRADE
The first method is work trade, which is basically doing maintenance, repair, or improvements to a property in exchange for living there rent-free or with minimal rent. In order to go about doing this, the first step is usually to contact the owner of the property and see if they already have plans for the location, tenants, or if they are generally receptive to meeting with you. The other alternative that is more risky, but I have also known to be successful, is to move in first, and then wait for the owner to stop by, tell them how much you love the space and want to fix it up for free! Either way, there is usually a higher chance of success if the property is owned by a person or family as opposed to a real estate company or development corporation. If the owner is receptive, the next step is to create a document describing the length of time you will be allowed to stay there, what responsibilities you have, and what responsibilities the owner has, and what options you have once the agreement is over. ALWAYS try to get this in writing, and ALWAYS check to make sure your agreement is with the real owner of the property (again, check through the assessment office)
OPTION 2: BUYING DIRECT FROM AN OWNER
The second method is to buy directly from the owner. If you are looking to spend the least amount of money up-front, chances are you will be looking at a place that either needs a lot of repairs to be usable, or has a lot of money owed on the property (called liens “leans” in the real estate world). These liens are most commonly back property taxes owed to the county and old water bills owed to private utility companies. Unfortunately, the law in Pennsylvania is that water bills are inherited with the property, so if you buy a property with a large water bill debt, you inherit that debt unless you make a special agreement during the purchase to say otherwise.
The upside of this situation for you as a prospective buyer is that there are a lot of vacant properties in Pittsburgh (due to the poor economy and the region’s yearly loss of population, among other factors) owned by folks who no longer live in the city, and it can be quite easy to find someone to convince to sell you a property for free or very cheaply in exchange for you doing the repairs and/or taking over the payment of the liens on the property.
To actually buy the house, you need to contact a lawyer or a closing company. Closing companies can be found under “Title Companies & Agents” in the Yellow Pages. Many of these companies will also do a title search for you and/or sell title insurance. A title search basically finds out and liens, debts, or ownership disputes on the property, and title insurance covers you in case an unknown lien, debt or ownership dispute surfaces later. The costs to transfer the title of the property and officially buy the house (known as “closing costs”) will be based on a percentage of the sale price, but be prepared to pay an absolute minimum of about $500-750 in closing costs, due to all the legal fees involved.
OPTION 3: TAX SALES & SHERIFF SALES
In Pittsburgh, it is becoming more and more common for the city and county governments to hold different types of auctions to sell off properties which have not had their property taxes paid. This is done for three reasons: to scare current delinquent owners into paying their taxes so they don’t lose their property, to find new owners who will pay taxes on these properties, and to give the government legal authority to seize these properties. This can be a sad and rather tragic process when people are still living or utilizing the property up for auction, and as a general rule it is unethical to bid on properties the original occupants are still interested in maintaining. However, because of the decreasing population there are many houses that have been genuinely abandoned. It is best to find out the situation with properties before the auction! Go to the house, knock on the door, talk to neighbors, and try to figure out if this is really a property it would be okay to purchase, and not part of an eviction.
If your property is being threatened with foreclosure, tax sale, sheriff sale, or repossession, here are some resources to help you fight it:
Consumer Credit Counsler of Western PA 888-511-2227 Action Housing 800 792-2801 Acorn of Allegheny County 877-722-2676 Neighborhood Housing Services 412-429-2842 Garfield Jubilee – 412-655-5200 Fair Housing Partnership – 412-391-9962 MonValley Unemployment Committee – 412-462-9962 Pennsylvania Housing Finance Agency – 412-429-2842 Urban League of Pittsburgh – 412-227-4802 Community Action Southwest – 724-852-2893
*A reverse mortgage enables older homeowners (62+) to convert part of the equity in their homes into tax-free income without having to sell the home, give up their title or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments for you.
Should your property be among those listed for Sheriff’s sale information is available by contacting the Allegheny County Sheriff’s Office
Mortgage Foreclosure Hotline at 412-350-4704 daily Monday thru Friday (except holidays) between the hours of 9:00AM and 11:00AM and from 1:00PM to 3:00 PM
TAX SALES are properties being sold for delinquent taxes, and the starting bids for these properties will be equal to the amount of taxes owed on the property, not based on the assessed value of the property. Therefore, the bid price can be much lower than what the property is worth (it could be higher too!). The most important thing to know is that these properties are NOT sold “free and clear” (without liens), so therefore you will become responsible for any liens, debts, etc. owed on these properties if you are the highest bidder at auction. If you are the highest bidder, you must have the funds to pay the starting bid price (aka the amount of taxes owed on the property) as soon as the auction is over, and you will have a month to pay the rest of your bid if it was higher than the starting price, plus any of the tax liens owed to local, state, or federal government, and the water bill. If you don’t pay any of these liens before the month is over or you will lose possession of the property. The main problem with this whole system is that you don’t know before bidding how much debt is owed on any of the properties, and the sales are usually publicized only 1-2 weeks in advance, which is often not enough time to have a full title search performed on the property. So, the process is risky, and you may end up paying a lot more than you planned for the property because of being forced to assume all the debts owed on it.
Tax Sales location:
City Council Chambers, 5th Floor
City-County Building, Pittsburgh, PA 15219
(located in downtown, corner of Fifth Ave & Grant St)
For info on when tax sales are schedule and the process, contact the City Treasurer: 412-255-2525
414 Grant Street City-County Building
City-provided list of tax delinquent properties:
SHERIFF SALES are more general sales of government-seized things, such as cars, personal possessions, but include selling buildings. Property sold at sheriff sales are sold “free and clear,” which means that, as opposed to tax sales, your high bid will get you the property at face value, and you will not be responsible for paying any of the previous liens owed on the property – the government takes care of those for you. CONFIRM THAT PROPERTY IS BEING SOLD FREE AND CLEAR BEFORE YOU BID!!! If you are the high bidder, you must pay 10% of the final bid price immediately, with either cash or a certified check. The full amount is due by the Friday following the sale before 10:00am. Therefore, you must have the cash available beforehand if you want to get a property this way! The minimum price for any property sold at sheriff sale will be at least $1600 + the taxes owed on the property
Sheriff Sales Gold Room, 4th floor Allegheny County Courthouse
436 Grant Street, Pittsburgh, Pennsylvania. How can I find out if a To Allegheny County Sheriff’s Office (more info about sheriff sales)
(412) 350-4704 or (412) 350-4738
Both tax sales and sheriff sales are advertised in the “Legal Notices” section of the Pittsburgh Post-Gazette for the three Mondays before the sales are to be held.
OPTION 4: BUYING PROPERTY THROUGH THE CITY OF PITTSBURGH
Properties in Pittsburgh that have been repossessed by the city, including vacant land, are sold through the Department of Finance, Real Estate Division. For a list of the properties they have for sale and how the process works, contact this department in the City-County Building downtown, or visit their very thorough website (address below), which has listings of their properties and the process for purchasing them (also a bidding process).
Here is a general outline of the process:
1. Go to the Real Estate Division or their website and look at the list of properties for sale. There are two types: “court auction sales” and “sealed bid sales.”
2. The addresses of properties are listed with their info, so you can visit the outside, and also can arrange with Ed Jacobs of the Real Estate Division to meet and see the inside of houses on the list.
3. Fill out a “Request to Purchase” form and submit to City Department of Finance. Make sure your taxes have been paid for the years you’ve lived/worked in Pittsburgh or you will be denied! You should find out within a month whether you have be approved.
4. Negotiate with the Real Estate Division on a purchase price and then submit your offer, along with your “hand money,” which is 10% of the purchase price and cannot be refunded regardless of the outcome.
5. A few weeks later, the Finance Department will contact you with the “Agreement to Buy” and you will have to go to their offices to sign it.
6. Once you have signed this agreement, you need to find a closing company “Commonwealth Land America” is recommended, but you can look for others in the phonebook. You will need to get a title report of all liens against the property, which will cost $200-300 and you have to pay for it even if you don’t end up purchasing the property. Once it is prepared, you need to give a copy to the Finance Department.
7. The City of Pittsburgh Legal Department will send out notices to everyone who has a lien against the property notifying them of the sale. They have 12 months to respond. If they object to the sale, the city cannot sell the property and you will lose your hand money and the cost of the title report. If there are no objections in 12 months, the Real Estate Division will contact you to finalize the sale.
8. You will need a closing company, usually your title company will put you in touch with one, and they will draw up the deed and finalize the sale. This will cost you several hundred dollars in fees + a percentage of the sale price. You will need to pay this company the final price plus these costs.
9. Once you receive the deed, you will have two years to bring the property “up to code” under the terms of the sale through the City Real Estate Division or they have a right to repossess the property.
10. Unfortunately, at any time before the sale is finalized, another bidder can make an offer on the property. If there are any other bidders, a meeting will be arranged for all parties interested in the property to meet in court and make offers on the property before a judge. The highest bidder will get to continue the process, and everyone else will lose their hand money and any other costs they incurred up until that point (title search, etc). So beware, you may end up paying much more than the initial bid price if anyone else becomes interested in the property!
11. The whole process will take at least 12-15 months from start to finish.
Department of Finance 200 City-County Building
414 Grant Street Pittsburgh, PA 15219-2476
Phone: 412-255-2582 Fax: 412-255-8649
Real Estate Division Office (Hours M-F 8:15-4:30)
City-County Building, 1st Floor 414 Grant Street
Pittsburgh, PA 15219. 412-255-2525.: Ed Jacob, 412-255-2300.
Website with property listings, outline of the purchasing process, and necessary forms:
NeighborHood Realty Services 1028 S. Braddock Ave Pgh, PA 15218 412-512-3756 www.neighborhoodrealtyservices.com firstname.lastname@example.org
Doug Stewart works here. He is a realestate agent for the people. He is extremely knowledgeable and generous with said knowledge and helps you find cheep ways of doing things. (love him)