How to Buy Tax Leins Online
If a homeowner falls behind on paying property taxes, the government can place a lien against the property. This can be in the form of either a tax lien certificate or tax deed. A tax lien certificate is when an investor provides the homeowner with a loan in the amount of back taxes. In exchange for back taxes, the investor can charge interest on the loan. If the homeowner defaults on the loan, the investor receives the property. A tax deed, on the other hand, is the outright sale of the house for the back taxes due on the property. But how do you do purchase these documents online?
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Instructions
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Go online to bid4assets.com or your tax collector office to look up properties which have a lien against them. Tax lien records are usually kept by the tax office or county courthouse for the city you live in. However, bid4assets.com is a national database used by tax collectors.
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Take note of the address and the minimum bid amount, as well as the auction date for the property.
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Hire an inspector to thoroughly assess the house before bidding, especially if it's a tax deed auction where you're bidding for the property outright. Online pictures can be very different from what the actual property looks like, so do your due diligence and visit the property.
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Place a bid. Bids for tax liens can be based on the dollar amount of the house or the interest rate paid on the loan to the homeowner. In general, the auctioneer will ask for opening bids. In the case of a tax lien deed, this amount will usually be the minimum bid price. However, for a tax lien certificate, this amount will likely be the maximum amount of interest that your state allows for tax lien certificates. In the end, the last bidder standing is the one to win the certificate or deed.
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