There are so many counties in the United States that conduct separate tax sales for their own liens. Why do these counties sell these tax liens in the first place? It is because they need the money to pay for public services such as police, schools, hospitals, parks, and many more. By state laws, every county is authorized to collect the taxes due from each homeowner, which remains unpaid by selling at public auctions. This can either be tax lien certificates or tax deeds. It can also be both.
There are some books on the subject of selling tax liens. Most counties have websites where you can get a list of these liens for sale. Auction dates and frequently asked questions are also available to read. Moreover, there are a number of approaches you can take to get more information which can be found in the internet.
There are lots of counties in the United States and each of them conducts separate auctions for tax liens. Most of these counties have websites where you acquire a list of tax liens available, date of auction, and answers to frequently asked questions. You can get these resources for free or at a price.
While there are a number of approaches that you can do at this point, the first thing to do is to conduct a research in your own county. Go through the treasurer’s page on the website and find out the following:
-The date of the tax lien sale
-The location of the sale
-List of properties to be auctioned
-Rules of the sale
-List of unsold tax lien properties from previous sale
Once you acquire the information, set a schedule and the budget you’re going to need to buy the liens to the properties.
There are procedural requirements in a tax lien sale that must be followed by the authority holding the auction. First, a notice must be provided to the homeowner. The notice would give a warning to him that his property is going to be sold. It also gives a chance to pay any unpaid tax debt, fees, and other charges that have accumulated in the process. Satisfying the tax debt to the government would give the homeowner an opportunity to avoid foreclosure, and losing his property.
Another procedural requirement that is worth noticing is the right of redemption by the homeowner. A lot of states have redemption laws. Such laws provide the homeowner a fixed period of time to pay any tax debt he owed. The time period starts after the property is sold at the tax lien auction. If the homeowner is able to pay up, he remains the rightful owner of the property.
Tax lien certificates are in large numbers today because property owners fail to pay their tax obligations to the government. When this happens, the government would put a lien on the property without hesitation. They need to do this in order to recover lost revenues which in turn provide public services to the people.
If the property owner fails to pay back his tax debt within the redemption period, the government can sell off the property in the form of a tax lien certificate. They can also foreclose it and sell the deed at a public auction. Through this the investors can get a chance to take control of the lien, and earn an interest when the government sells off the property.
Investors that are interested in investing their money in tax lien certificates need to know when and where the sale would be held. These tax sales are normally advertised in the public. It also helps to take a visit in the county office to know more about this lucrative real estate investment.
Tax liens are placed on properties to guarantee that its taxes would have to be paid by the delinquent homeowners. If there is a lien on a property, it cannot be refinanced nor sold until the taxes are paid.
Real estate investors can purchase tax liens as investments that pay interest rate as profits. Liens are bought at a tax sale auction. The investor who is willing to take the lowest rate of return gets the lien certificate. Once the property is sold, the investor gets back his initial investment plus interest rate. The amount is usually bigger than the investor could make in the stock market. If the property is foreclosed, then the investor would get the right to own the property.
With lots of foreclosure in properties today because of homeowners unable to pay their taxes, how would you purchase one? There are some things to consider though when purchasing a tax lien or tax deed property. Here they are:
In most U.S. states, you purchase the property at a tax lien sale or tax deed auction. You are not allowed to access the property before the sale. You would just have the address in advance and at least drive-by to get a glimpse of its condition.
There are times when you drive-by you would see that the property is either occupied or vacant. If it is occupied, you would need to evict the current residents in accordance to the local laws. You must not forget this because the people living there might not move out, even after you buy the property.
All liens on the property must be recorded. Check with your municipality or county to understand the rules in your area. Ensure that you know the liens imposed upon the property. You can search for this through the county office that conducts the property registration in your area.
There are homeowners who either forget to pay their tax responsibilities or intentionally avoid it. In cases like this, the county is going to issue tax liens on the property of the delinquent taxpayer. When the tax liens are imposed, it becomes a great opportunity for you to secure the tax lien certificate by bidding in auctions conducted by the county.
After successfully bidding in an auction, you would get the tax lien certificate. This does not grant you the ownership of the property yet. This means for the moment that the delinquent homeowner needs to pay his tax debt or lose the property. The title of the property can only be awarded to you after several months or years, if the homeowner is unable to make his payments. Therefore, it is important to hold on to your tax lien certificate since it is a wonderful option on a worthwhile investment.
Let’s begin by understanding the definition of a tax lien. Counties put a lien on a parcel for the reason of delinquent taxes by the homeowner. Then, the county publishes a list of all tax sale properties available. They set a time and place where the auction would be held. They also give out information on what to bring along as well as the fees required.
The treasurer of the county usually does all the auctioning on the day of the sale. If you decide to purchase a tax lien certificate, you’re going to be the lien holder of the parcel. By becoming a lien certificate holder, you need to understand two situations. First, once you invest your money, you’re guaranteed on profits with your initial investment. Second, if the homeowner doesn’t pay his back taxes on the due date, then you can foreclose the property and apply for rights of ownership. You become the new property owner with no mortgage or other liens. As you can see, tax lien certificate investing is not only fun but also very rewarding.
Are there things to be aware of if you want to invest in tax deeds for sale? Here are some pointers:
Lots of U.S. counties vary in regulations about tax sales in their respective areas. It is best to research online via the internet about the background of the county to save time. Use the websites wisely by acquiring the list of auction schedules that are being offered. This may be a tedious task but would really pay off in the end knowing that you can get properties at a cheap price.
Whether you have previously joined in a tax deed auction from a different county or not, it is still very important to know the whole process before purchasing tax deeds. Furthermore, remember to make an account prior to bidding and buying off properties. Counties do not need fees when creating an account for interested investors. However, you must verify this before making an account in the county where you’re planning to buy tax deeds to avoid problems.
Most states in the U.S. offer tax deeds in which the redemption period ends usually in the day prior to the actual sale. However, there are a few exceptions to be noted like for example the state of Texas. Texas offers redeemable tax deeds.
Remember that Texas is one of the tax deed states. This simply means it does not offer tax liens. Each county in this state wherein a tax delinquent property is located, would be put up in an auction and sold off after two years of delinquency. This happens in many counties around Texas and as often as once a month. Moreover, during this time, a stable stream of tax delinquent properties is being sold to the highest bidders.