State Tax Lien & Deed Sales List
Tips for Bidding at Tax Deed Auctions
Written by: Thomas Needles
Acquiring tax deeds is very similar to acquiring tax liens, however there are variations between the two. Tax liens are dependant upon the actions of the property owners during the redemption period, and those actions determine if you will receive monetary compensation or real estate. Tax deeds operate differently, though. The highest bidder on a tax deed becomes the legal owner of the property as soon as they pay the county. A redemption period does not exist. The original land owner does not have a chance to regain legal ownership of the property. Which type of auction is available varies by state and by county, so research is necessary if you are looking to acquire property or acquire money.
Deciding to invest in tax deeds and gain ownership of real estate is an excellent way to become successful. There are numerous homes, properties and lots available for you to buy and sell, rent or build upon. There will be tax deeds for beautiful homes and tax deeds for decrepit shacks. Background investigation is vital to your success. Owning a tax deed to a home that is beyond repair is a financial nightmare. Some tax deeds are for lots that are simply too small to build upon. This can become a lost investment if care is not taken in avoiding it. It is wiser to spend the money bidding on higher priced tax deeds and on more quality properties than to bid low and have to spend the money bringing the building up to code.
See it, Learn it, Own it
A visual inspection is the best and most highly recommended form of preparation for a tax deed auction. This will give you an accurate representation of the property as well as the surrounding area. You can also learn a great deal about the property by visiting the county office asking to see the files on the property. This can grant you information that you can not learn upon a visual inspection such as appraisal value, tax liens that exist on the property, taxes owed to the government and the type of property. The difference between success and failure is the amount of knowledge an investor has. Having seen the physical condition of the property and knowing the background history makes you incredibly challenging to your other competitors who rarely educate themselves on properties and bid blindly. You can beat them by bidding smart.
Once you have gathered visual and background information, you can begin the process of comparison. Unlike tax liens, tax deeds grant you the property immediately. It is vital to your success to for the property you purchase to have versatile marketability to either lease or sell. Especially in today's market, there are more homes available than ever. Make sure that the investments you make are in areas where property sales are at least steady so that your investment will not go by the wayside.
Day by Day Changes to Tax Deed Auctions
Do not get your hopes set out for a particular property too early before the auction. It is a common occurrence that a home with a pending tax deed will redeem before the auction. This means that it will not be available to bid on. Make sure you check the status of the properties that you are interested in on a continual basis up to the date of the auction so that you do not travel for homes that will not be available to you.
In addition to a tax deed, tax liens can be held over the house as well. While this is not commonplace, make sure the property you bid for is tax lien free. If a tax lien does exist and is upheld legally after you have purchased the tax deed, you will not completely own the property which will make it harder to foreclose and make a profit. You should especially avoid IRS tax liens. The profit is miniscule in comparison to the potential earnings from selling the property for market value. Through an IRS tax lien, it is rare that you will walk away with real estate. Research this intensely before bidding on tax deeds with tax liens.
Tax deed auctions require more investigation on your part due to the fact that once bought, it is your responsibility to make them earn money. There is no reimbursement of your investment. Your investment is final. Make sure that if you are traveling to an auction, you know whether it is a tax lien or a tax deed. Both are wonderful investments, but both have different methods of success.
