How to Buy a Foreclosed Property by Paying the Back Taxes

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If a homeowner owes back property taxes on a property, the county to which the property taxes are due has the right to foreclose on the property. In cases where a county now owns a foreclosed property, they typically auction the home for sale to recoup the property taxes that are due. For you, the interested home buyer, this means that you may be able to purchase the home by paying the back taxes that may be due on a property.

Things You'll Need

  • Tax deed/title
  • Determine the amount of the back taxes. Call the county tax collector's office where the property is located and inquire about the amount of back taxes that are owed. If the home is up for auction, the auction list of properties also contains this information.

  • Find out who owns the property. If the property has been foreclosed on by the mortgage lender or bank, then the bank may own the home. If the home did not have a mortgage, but only had a tax lien, then the county in which the property is located may own it. If the home is about to go into foreclosure because of back taxes owed, then the homeowner may still own the property.

  • Find out who handles tax deeds or tax lien sales for the county. Contact the county clerk's office at the county courthouse. Ask which department handles tax deed or tax lien sales for back taxes owed. It's typically the department of revenue, the tax commissioner's office or the tax collector's office for the county.

  • Purchase the tax lien on the property. Counties sell tax liens in different ways, so find out what the process is for your county. Some auction off the homes on the steps of the county courthouse, so you have to bid on the tax lien this way. Other counties simply require you to show up at the tax lien sales office and pay the amount of back taxes due. Most counties, however, require that you pay the back taxes in cash.

  • Obtain the title. Hire a real estate attorney to deal with the deed for the property. The real estate attorney can run a title search to make sure the title is free and clear of any other problems with mortgages or nuisances. You'll need a clear title if and when you sell the property. The real estate attorney also records the deed with the county, showing that you are the registered owner of the property.

References

  • Photo Credit tax defined image by Christopher Walker from Fotolia.com
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