How to Buy Property Through County Tax Liens
Real estate investors and even those individuals seeking a homestead property may use tax lien properties as an investment vehicle. Tax lien properties are land or improved properties (single family homes, duplexes, triplexes, and free-standing apartment buildings) that are put up for auction by the county government that collects property taxes.
The auction is advertised usually through local newspapers, but may also be found online at the Tax Collector's Office or Tax Assessor's Office (whichever local county government agency collects property taxes).
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Tax lien properties are published in local newspaper Find tax lien auctions. Tax liens are placed against a property when the owner has fallen in arrears in their property taxes and recorded through the Clerk of the Circuit Court's Office. Once recorded, they become public record and are usually published in the legal section of local newspapers. Tax lien properties may also be found on website of the county agency that collects property taxes.
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Visit the properties Visit the properties. Properties may or may not be vacant, in need of repair or improvements, in or out of compliance with local ordinances and/or codes. In any case, it is imperative to visit the property to ascertain its condition and to gather information about the neighborhood this would be but not limited to: are there homes for sale nearby? What condition is the overall neighborhood in? Is the tax lien property comparable in size to surrounding properties? Is there recreation, schools, shopping nearby?
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Research comparable properties Research comparable properties recently sold. After assessing the neighborhood, compare the tax lien property with similar properties that have sold in the past three to six months and to similar properties that are currently for sale. This will allow you to estimate the true market value of the property and provide a guideline for how much you are willing to bid at the tax lien auction for the property.
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Bid on tax lien properties at the auction Attend the county tax lien auction. At the auction any property bid on usually must be paid for the same business day and in most cases, the bid must be paid in cash. Tax lien auctions are usually held at a county court house and the schedule of auctions can be found in the local newspaper or on the website of the government agency holding the lien.
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Tips & Warnings
Laws differ from state to state, but nearly all give the homeowner a year to repay the tax arrears to avoid having the title or deed passed to another individual.
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