How to Buy Tax Foreclosed Properties in Texas

Foreclosed properties are auctioned on the first Tuesday of each month at the courthouse of the county in which they are located.

Anyone with the stomach for a feisty bidding contest and cash to back up the bid can purchase foreclosure properties for auction in Texas.



Foreclosed properties go up for sale the first Tuesday of each month at the courthouse of the county in which they are located, usually between 10 a.m. and 4 p.m. The bidding and acceptance process is typically handled by a trustee who represents the foreclosing lending institution or law firm. Tax liens supersede all other liens, including bank liens; in fact, the lending institution itself will likely be bidding on the foreclosed property.

Things You'll Need

• Cash or a cashier's check to pay for the property

Instructions

1. Contact the County Clerk's office in the county in which you plan to bid and ask where a list of properties for sale at the next tax foreclosure is posted. Typically, this will be on the courthouse door, though some counties additionally display this list online. Legally, this list must be posted 21 days in advance of the foreclosure.

   The list will include, for each property: the name of the borrower, the recorded volume and deed number, the recorded document number, the name of the trustee, the time and location of the sale, and the terms of the sale (as set by the trustee). It may or may not include the actual legal description/address of the property.

2. Obtain cash or a note of certified funds to pay for property you plan to purchase. Have this available the day you purchase a property.

3. Arrive early the day of the foreclosure auction. Some counties have limitations on the number of people that can attend a foreclosure auction.

4. Verbally bid on the property or properties you are interested in when the property is announced by the trustee. Bidding times are typically written as a three-hour window as part of the posting list, and, legally, the property's sale may be announced any time during that period.

5. Provide the trustee payment in the time frame agreed to in the terms of the sale. This may be as little as ten minutes or as long as 24 hours.

Tips & Warnings

• Attend a few foreclosure hearings before bidding on properties. There is no one individual who oversees the process, and it can be a highly chaotic environment.

• If a property address is not recorded with the posting at the courthouse, you can access this information through the relevant county appraisal district's website against the borrower's name.

• At auction, the trustee for a property is not required to wear any particular type of dress, so you will only know the trustee by the fact that he is announcing a sale.

• A foreclosure property is not inherently a value-priced home. Know the market value of the property or properties you plan to bid on prior to attending a foreclosure. Drive by the property to assess its condition. Research surrounding values online on your own, or, for a more thorough analysis, contact a local appraiser or real estate agent and ask for a complete market analysis of the property. The bank itself will likely be bidding on the property, and it's possible they will bid what the owner owes, which may be more than market value.

• Be aware of the Buyer's Right of Redemption. This code allows the borrower whose property was foreclosed to reclaim the property within two years of the sale. If the borrower reclaim the property from you, he must pay you 25 percent interest on your purchase price for the first year and 50 percent interest on your purchase price the second year, plus additional taxes and fees on the property.

References

• Texas Property Code Section 51.002: Sale of Real Property Under Contract Lien
• "The Foreclosure Process in Texas"; Randy Gool; 2009
• Texas Tax Code Section 34.21: Right of Redemption