There are a lot of things that get confiscated by the government for various reasons and in the cases of houses and properties, they usually end up being auctioned off at a delinquent tax sale. You can find out about these and bid on these properties yourself, but before you do, get to know a little bit about how it all works. |
To begin with when someone doesn't pay what they owe the government, his property gets listed as being behind on payments. Usually these listings are published in a local newspaper semi-annually and there is a time frame that the owner has to get caught up. If the owner doesn't pay up, then the property goes to auction at a delinquent tax sale.
These properties are listed in various places such as newspapers and on the Internet. There will be a time and place for the auction, or in some cases it will take place online. If you want to buy one of these properties, the starting price will be at whatever amount of back taxes are owed and then go up from there. You bid against other buyers, like in any other auction, and the high bidder wins.
But, just because you won the auction doesn't necessarily mean you own the property. In a lot of cases the owner gets a chance to pay what he owes to redeem the property, and this can vary from state to state. It can be as long as several years.
So, basically you have a property that is in limbo until the grace period ends, but if it's not redeemed, you get the deed. If it is redeemed, you get all the money back from the government that you spent, plus interest.
You also need to be aware that these are usually cash-on-the-spot deals. You will need to research what kind of payments are accepted, but expect to lay down a good-sized chunk of change to acquire these at the time of the auction. Some areas offer a timetable to make payments, but others do not.
This can be an excellent way to buy property with substantial savings, but like anything else, you don't want to walk into this kind of deal blind. If you are interested in buying at a delinquent tax sale do a little research first. Go to your local county courthouse and ask about these auctions. Find out all the details.
Also, get a list of the properties available and go take a look at them. Some will be great deals, and others will be in horrible shape and have other problems you want to be aware of ahead of time. Get a pretty solid idea of what the property is actually worth on today's market and use that to gauge what you are willing to pay for it.
You can make some good investments and find great deals at a delinquent tax sale, but learn the game before you play. Remember that there will always be another auction down the road, so be a little patient and get what you want at the right price.
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