Many savvy investors purchase property at a delinquent tax sale. While anyone can participate in this type of event, there are several things that you need to know before you jump in with both feet. When someone is unable to pay their taxes, the government can place a lien on their property. That person will be given a chance to meet their obligations. But if they don't, a governmental authority can seize that property as payment. Periodically, the properties that are seized will be available through a delinquent tax sale auction. You'll usually find listings in your local paper twice a year, but they can also be listed on the Internet. The time and the place for the auction will be listed unless it is an online auction. The amount of back taxes that are owed will usually be the starting price at the auction. It will then go up in increments until the highest bid is reached, just like any other auction. However, you will not necessarily own the property even if you have the highest bid. There are many instances where the original owner will be given one last opportunity to pay what is necessary to redeem the property, depending on the law in your state. It is quite possible that you will have to wait a very long time, even several years, to achieve full ownership. Most of the time, the property you bid the most for in the auction will remain in a sort of limbo until the grace period is over. Once that time period is up, you get the deed if the property has not been redeemed. If it has been redeemed, then you'll be paid back the amount of money you bid plus interest. Another thing that you need to be aware of is the fact that you'll need to have the full amount of your bid in your bank account should you win. In most of these auctions, winning bidders have to pay the full amount on the spot. There are some states where you will be able to make payment arrangements, so make sure you carefully research the terms of the auction you are interested in attending. You also want to be as familiar as possible with the properties that are available. You may win a bid in a delinquent tax sale and think you've made a great deal, only to later realize that the property is in shambles. It may take much more money than you planned on spending to make it useable. You'll want as good an idea as possible regarding the shape of the property, as well as its value, before you ever make any sort of bid. Learn the ins and outs of delinquent tax sale before you start purchasing properties. Visit CivicSource to find out the rules and regulations regarding this type of sale. Find out more at: http://www.civicsource.com.
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