State Tax Lien & Deed Sales List
Guiding Yourself Through Tax Lien Sales
Written by: Thomas Needles
Just like looking at the newspaper classifieds, the variety and number of options involved in tax lien sales can become overwhelming to the uneducated consumer. When you do not know what a good or a bad deal is, it is terribly hard to judge a tax lien sale accurately. You can assume certain things, but it is much better to make an informed decision. After all, this is an investment that, if made well, can provide you with an excellent source of income.
You may be asking yourself why these liens are available to the consumer in the first place. The government has many financial responsibilities that require money immediately. When someone fails to provide money, this causes other aspects of government to waiver. For example, roads can't be finished if the workers don't get paid. Healthcare cannot be provided if the doctors don't get their money. No one wants to work for free. As a result, the government holds tax lien sales to get the money they need right away. If you can provide the money to the government now, you can become eligible as an owner of the property, and should the owner provide the back taxes, you are reimbursed and compensated for your investment. In a way, you are loaning money to the government and being rewarded for doing so!
The chances of you obtaining the property is even greater due to the fact that when you participate in a tax lien sale, the county penalizes the property owner with high interest rates and late fees, much like an angry credit card company. The home owner can either pay off the debt or lose the property within a redemption period that varies between 6 months to 3 years. It is wiser to seek the shorter redemption periods because you will have a higher income. The penalties and interest rates will be fresh and unpaid, which equal more money in your pocket. Remember, you earn the penalties and accrued interest when you participate in a tax lien sale.
Homes and Tax Lien Sales
It is a common misconception that homes available in tax lien sales are condemned or ill-kept due to irresponsible owners and are located in unfavorable areas. This is entirely untrue. While there are homes with tax liens that are in need of repair, there are also lots of nice properties that end up with a tax lien. Many homeowners borrow to improve these homes and then fall short afterward. Some homeowners simply have bouts of bad luck. Our economy is rocky and unemployment rates are creeping higher on a daily basis. Just think of all the people that have been shattered by the credit crunch. These are not homes that are distasteful shacks; they are homes that have just simply become too expensive to keep. Money management skills are not commonplace, and many wealthy individuals end up with homes that have a tax lien. This is an excellent opportunity for you the consumer to invest wisely and safely once you have the knowledge of the market.
Remember: These are not get-rich-quick investments; these are get-rich-smart investments. You need to do your homework to make the best choices in a tax lien sale. Know what state tax lien rules are as well as the length of their reimbursement. Once you understand the laws of your prospective area, you become that much closer to becoming a successful bidder on a tax lien sale.
