How to Purchase Tax Foreclosed Homes

Purchasing a tax foreclosed home may be tedious, but well worth the hassle.

Tax foreclosures occur when the previous owners of the property fail to pay the required government taxes on the homes. The local government sets up auctions to sell the homes that are in tax foreclosure. Buying a home in tax foreclosure offers an opportunity for you to purchase a home at below market value. It is important to view the home and assess any damage or repairs required. Also, obtain proper financing before attending a government auction of foreclosed homes.

Things You'll Need

• Computer
• Preapproval letter

Instructions

1. Visit the local tax office, generally located in the county courthouse, or government website to view listings of tax foreclosed homes (See References). Find a home that is of interest to you.

2. Obtain the address of the tax foreclosed home. View the home to determine how much work is required to make the home livable and if the location is suitable. Remember the cost involved with repairs is yours to pay. In a tax foreclosure, the local government does not make any representation of the property and it is sold as-is.

3. Prepare to purchase a tax foreclosed property by securing financing. If you plan to pay cash, carry a letter from the bank stating funds are available. If you plan to finance the property, acquire a preapproval letter from your mortgage company. Asking the local tax office how much is required down on the day of purchase provides you with an idea of how much cash to have available on hand. The required down payment must be made with a cashier's check on the day of the auction.

4. Arrive at the location of the tax auction which is generally the courthouse steps. Register to be able to purchase tax foreclosed property. Generally you are required to present a government issued form of identification, such as a driver's license and a social security card.

5. Wait for the property you are interested in buying to be announced. Bid on the foreclosed home. Have a set amount that you are willing to pay and stop when bidding reaches that amount. If you are the winning bidder, be prepared to offer the documents stating that you have the required funds for the home.

Tips & Warnings

• View your local newspaper listings for tax auctions.

• Contact the tax office to determine if additional fees are required.

References

• Buy Foreclosures Sale: Tax Lien Foreclosures
• Michigan Taxes: Property Tax Foreclosures
• Foreclosure Listings: What are Tax Liens?