How to Buy Government Tax Homes
There are two primary ways to purchase government tax homes. One is through a tax lien and the other is through a tax deed. Both are the result of a homeowner that cannot afford to pay back taxes on their property. Once this occurs, generally the homeowner is given two years to pay the amount owed before the government allows outside investors to either provide a loan to the homeowner (lien) or take over the property by making the full payment to the government (deed).
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Instructions
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Contact your local county property tax office. Let them know that you are looking for a list of delinquent tax properties. This might also be made available on the website or in the local paper.
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Inquire about when the tax sale is held and ask for a copy of the rules of the tax sale. Some counties refer to government tax sales as tax deed sales or government tax lien certificate sales. Federal tax home sales may also be referred to as tax levies.
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Research the properties available and search the public records for each property listed in the area you desire. You may have to go to the county appraiser's office to find information (recent sales, home values, sales history) on delinquent property records.
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Visit the property. Some properties read much better on paper, so do the proper due diligence and visit the home before placing a bid.
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Keep you bid as low as possible (maximum bid should be no more than 55 to 65 percent of market value). If the owner doesn't pay her taxes, you have a nice home at a bargain, if she does, you can make at least 20 percent on the loan.
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Tips & Warnings
Look for low risk properties which are easy to sell. This is generally single-family homes in good neighborhoods.
