BUYING PROPERTIES AT THE TAX AUCTION |
Some states sell tax certificates giving investors the right to pay unpaid property
taxes and then collect interest from the delinquent property owners until the
taxes are paid or the property is eventually forfeited to the investor. Other
states seize the tax delinquent property and sell it at auction to the highest
bidder. These auctions are public and notice is normally posted at the County Courthouse or other public place and/or published in a newspaper of general record. Before attending one of these auctions, there are several things you need to know: 1) How often are the auctions held? In most ates the answer is once a year, but in Texas, for example, auctions are held every month 2) What is the bidding procedure? In Most instances the high bidder wins, but in some states, they use a fractionalization of interest system, where the dollar amount is fixed and the bidder who agrees to accept the smallest percentage of ownership in the property in exchange for that dollar amount, is declared the winner, 3) Is there a minimum bid? In most cases, no bids will be accepted below a specified minimum amount 4) What is the increment for over-bidding the minimum bid? In most cases, the auctioneer will set a minimum increment ($50, $100, $1,000, etc) for all bids over and above the minimum bid 5) Is the bidding final? In some states, the winning bid is only tentative and then other bidders have a certain period of time after the auction to over-bid 6) Do you get the property free and clear or subject to certain existing liens? In most states all other liens are wiped out when a property goes to tax foreclosure, but in some states, certain liens - particularly those filed by state or local government agencies - stay with the property. 7) Do you get the property subject to a right of redemption? Some states wait until the Redemption Period has expired before putting properties up for sale. Others states sell properties subject to the Right of Redemption, meaning that the delinquent property owner has a chance to redeem the property or buy it back, by repaying the investor with interest TAX SALE RICHES HOME PAGE |