Tax Lien Sale Guide.

 

 

Tax Lien Certificates are issued at tax lien sales. This means you pay the unpaid tax on the property you are interested in and this puts a lien on it. The property owner must pay the amount of the certificate plus interest in order to have the lien removed. If the lien however, is not redeemed within the redemption period, the purchaser of the tax lien certificate may foreclose on the subject property. There are different laws in each state that govern the foreclose process but some states allow the expiration of the lien to get into the process.
Bidding procedures vary in every state. Two of the most common are bidding down the interest rate and bidding up the premium. The amount over and above the lien is called the premium. Another type of bidding is to bid down the ownership interest in the property. In this case, the investor who is willing to accept the lowest percent ownership in the property wins this bid, should the lien be foreclosed. Finally, another bidding method is the random selection or round robin method - this is done instead of bidding down the percent ownership of the property.

                                           


Aside from the procedures, there is some prohibition in relation to the process. Most of states don't allow you to bid on the property which you have an interest in. The prohibition extends to the owners and to any relative of the owners of the property. Collusion of sales are also prohibited, which means that any negotiation you have with other bidders before the sale of the property you want is illegal.
Pre-registration is also required; this depends on the county and state where you wish to bid. A few of the states require a refundable deposit, usually in certified funds, in order for this to go through. Full payment in certified funds on the day of the sale is expected for most lien sales and they won't let you leave without paying. On the other hand, some states allow you time to produce the amount at a given time however, if you do not pay within the time frame, the property will be re-bid or sold in a later sale.
These tax sales often require in-person bidding, but some states have on-line bidding and others have over-the - counter sales after the bidding has not resulted in the sale of the tax lien

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About the Author

Steve is the owner of ./http://www.pinespropertiesllc.com/

in Real Estate / Property Management    (submitted 2013-10-16)