How to Invest in Tax Lien Certificates in Pennsylvania
Pennsylvania does not sell tax lien certificates to investors when a property owner is delinquent on his taxes. Instead, investors are able to purchase the property deed through tax auctions conducted by the county sheriff's office. When tax payments on Pennsylvania properties are three years behind -- two years delinquent plus the current year -- the property will be listed at a tax auction sale where the highest bidder wins full ownership of the property.
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Instructions
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Obtain a list of current tax sale properties via the local newspaper or on a county website. Wayne County, Pennsylvania, publishes its list in local newspapers, for example, while Philadelphia makes its list available via download from the sheriff's office website.
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Visit each property you are interested in bidding on at auction. Verifying the condition and personal worthiness of a property is the full responsibility of the investor because there are no refunds if you win a property at auction and later find that it does not meet your needs. It's a good idea to research each property as fully as you can as well, to determine whether there may be zoning ordinances, covenants or other restrictions that may hinder development or resale potential for the property.
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Register to bid at the tax sale for the county you want to purchase tax deeds in.
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Place a deposit for the auction according to the rules of the county you are bidding in. Philadelphia County requires a minimum deposit of $500, for example, or 10 percent of your expected total expense.
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Attend the auction at the designated date, time and location and bid on the properties you want to invest in. Auctions are conducted live, in person and by voice. There are no sealed bids or silent auctions conducted for tax deed sales.
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Pay the remaining balance of amounts due for the properties you won at the tax auction. In some counties, payment must be made immediately at the end of the auction while in others you must submit the balance due to the sheriff's office within 30 days. Payment generally must be made by cash, certified check, money order or an attorney's check.
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Tips & Warnings
Tax deeds sold in Pennsylvania are subject to other liens, judgments and mortgages. This means that the auction may not cover other liens due for county clean up service, for example, or Internal Revenue Service liens. If other liens exist, those lien holders may have legal interest and rights in the property that may need to be paid by the auction winner, or resolved in court.
