County and local governments try to recoup the revenue lost due to delinquent property taxes by holding tax sales. Interested buyers can purchase properties at deeply discounted prices. In most cases, properties sold through tax foreclosure are sold as-is. This means that you're willing to buy the property in exactly the condition it currently stands, whether it's in good condition or needs repairs.
Property Tax Foreclosure
When a homeowner stops making his mortgage payments, the bank forecloses on the property. Likewise, foreclosure can also occur if a homeowner fails to pay his property taxes. Because property taxes are assessed and collected at the local county or city level, the specific foreclosure process will vary by location.
Tax Sale Advertisement
In most locations there's usually a rule that requires the tax sale to be advertised for a specific period of time. Advertisements are typically placed in a local newspaper, on the county's website or physically posted at the county courthouse or tax office. Start with the advertisements to determine what properties you're interested in bidding on.
Contact the tax collector's office for information to register for the sale. Pre-registration is a common requirement to attend or participate in a tax sale, however some locations allow you to register on the day of the sale. Additionally, participants may be asked to pay a deposit.
The starting bid for most properties is commonly determined based on the amount of the past-due property taxes, plus any applicable fees the delinquent homeowner owes. The property is sold to the highest bidder. Generally payment in full is due at the time of the sale, or by the end of the business day. Cashier's checks are commonly accepted as payment.
After your bid is accepted and the county receives your payment, a deed will be issued granting you ownership of the property. It is recorded with the county land records, and the original document is then returned to you.
- Stockbyte/Stockbyte/Getty Images
- What if You Disagree With a Bank Appraisal?
- How to Find Out What Bank Owns a Foreclosed House
- Advantages & Disadvantages of Electronic Paycheck Bank Deposits
- What Is a Pre-Qualified Letter?
- Why Does Getting a Mortgage From a Bank Take So Long?
- What Is the Difference Between a Mortgage Bank and a Correspondent Lender?
- What Is the MICR Line on a Check?
- What Is the Difference Between Mezzanine Debt & Subordinated Debt?
- What Happens if the Bank Declines Your Modification?
- List of Things to Look for When Buying a House