How to Buy Foreclosure Taxes on Houses

Learn how to buy homes in tax foreclosure sales.

When a home is foreclosed upon because of lack of payment on taxes, the home is typically sold by the county that is owed the taxes in order for the county to recoup the tax money due. An investor can then purchase the home for the amount of the taxes due at the auction, thus becoming the new owner of the property. Before you buy foreclosure taxes on houses, you should conduct some research on the process so that you fully understand how buying tax foreclosure homes works and what you need to do to make it as beneficial as possible.

Instructions

1. Conduct a title search on the property. A title search can be conducted by you by reviewing the county public property records, or you can hire a title company to conduct the search for you. A title search shows all of the previous owners of the property, including the current owner, and also reveals if there are any existing liens or mortgages on the property, other than the tax lien placed by the county for lack of tax payment.

2. Research state laws on foreclosure tax sales. Different states have different laws when it comes to foreclosure tax sales. Some states offer current owners a period of time even after the home has been foreclosed upon, to pay the back taxes and reclaim ownership of the home. In some states this can delay the time frame in which you can take ownership of the home, while other states such as Florida, do not have a waiting period at all, which means you can possession of the home once you pay the taxes.

3. Obtain the warranty deed on the property. When you pay for the taxes on the home or win the home at the county auction, make sure you obtain the warranty deed for the property, which is usually provided after you buy the home at auction by paying the back taxes due. The warranty deed is your proof of ownership of the property.

4. Request a mortgage satisfaction letter. If there were any mortgages or liens on the property other than the tax lien, then you need to contact the bank or mortgage lender that holds the mortgage on the property. Request a mortgage satisfaction letter, which releases the lien the bank or lender had on the property and clears the title to the property as well.

References

• Ask me Help Desk: Tax Deed Sale Title
• Ask me Help Desk: Request Copy of House Deed
• Foreclosure: Tax Deed Sales
• World Village: Downfalls of Tax Deed Sales