Government Tax Deed Sales

Tax Deed Sales are also known as Tax Auctions, Tax Sales, or Public Bid Foreclosure Auctions. The difference between Tax Lien Certificates, Tax Deed Sales, and Foreclosures can be somewhat confusing. Tax Lien Certificates and Tax Deed Sales are the 2 processes used by local governments to collect on delinquent property taxes. When people talk about foreclosures, they are usually referring to a property owner defaulting on thier mortgage. With foreclosures the interested party is the bank holding the mortgage, verses the local government being the interested party with default property taxes.

The Tax Deed Sale is a process where the local government holds an auction for tax delinquent property. Unlike Tax Lien Certificates, when you bid on a property at a Tax Deed Sale, you are actually bidding on ownership of the property. Usually the minimum bid is the sum of property taxes owed, plus any administrative charges and interest on the amount owed. The winning bidder at the Tax Deed Sale is awarded either a Treasurer's Deed or Absolute Deed to the property. There may be certain encumbrances on the deed, such as a "Right of Redemption". This allows the former owner to buy back the property from the investor within a certain period of time. Redemption periods are usually associated with Tax Lien Certificates. Once the redemption period expires on a Tax Lien Certificate, you can foreclose on the property, and possibly receive a deed to the property.

Benefits of Investing in Tax Deeds

You get a deed to the property, which means ownership and all of the rights associated with owning that property.
You have the potential of purchasing property for pennies on the dollar. Buying real estate below market value is usually considered a good deal. But with tax deeds it's not uncommon to acquire a property 10 times below market value!