When you are buying a new home and trying to save cash, consider tax foreclosure properties in your search. Tax foreclosures are homes that local government usually auctions off in a public sale because the previous homeowner failed to pay taxes. You can get a good deal on one of these homes, though you must keep certain risks in mind. Some tax foreclosure properties require a lot of work to get the home up to acceptable living standards, and that cost is on your shoulders as the buyer. Many tax foreclosures are sold sight unseen.
Related Searches:
Difficulty:
Moderate
Instructions
1
Be prepared with enough cash to purchase a home or get prequalified for a home loan. Simply approach any mortgage lender with information about your income and credit history and a down payment you can afford. Once you receive loan preapproval, you will know the highest amount you can bid.
2
Visit your county's tax collector's office or website to inquire about current tax foreclosures. The local tax collector's office is the division that decides to foreclose on a home delinquent in taxes. You will receive information about the next public tax foreclosure auction. You can also visit a paid tax foreclosure listings website like ForeclosureListings.com or FreeForeclosureDatabase.com to get a comprehensive listing of the most recent tax foreclosures in your area (see Resources).
3
Visit the property you would like to buy. You may not be able to gain access to the interior but you can at least get an idea of its exterior condition. Bring a home inspector with you if you can gain access inside.
4
Attend the public auction and place your bids on the property. If you win, some counties will require that you make a payment in cash that day for the property. Thus, come prepared to cut a cashier's check or make arrangements so your lender can close on the home loan and provide you a check that day.
Tips & Warnings
Keep in mind that a tax foreclosure (deed) sale is different from a tax lien sale. With a tax lien, the buyer is purchasing the tax debt that the homeowner owes. The homeowner is then responsible for paying back the lien buyer with interest.
The homeowner can pay the taxes due up to the day before the auction and keep the property. You will not be reimbursed for any money or time you invested in the property. Also, the previous owner may still be living at the property when you take ownership so you will be responsible for funding a formal eviction to gain possession.
Tax foreclosures, while they are difficult for those being evicted, are great investment opportunities for potential buyers. These foreclosures are initiated by...
Every year millions of homes are foreclosed either because of a delinquent mortgage or unpaid taxes. RealtyTrac reports that foreclosure notices were...
Government foreclosures are those on homes or land underwritten and insured through FHA or VA-approved financing. When these homes are foreclosed on,...
In April 2010, ForeclosureListings.com reported that there were 629,325 public auctions for tax foreclosures in the U.S. Tax foreclosures, also called tax...
