Tax foreclosure properties are properties that are sold to investors of the open market. These come about when an owner fails to pay their real estate or property taxes that are related to the residence they own after three years. The home is then allowed a two year redemption period in which the owner is expected to pay what is due or face severe penalties. If the account is not made current within the two year period, then the property is deeded to the county. These homes are then placed in auction and sold to the highest bidder. The new buyer holds the rights to the property, as long the tax liens are not paid.
Newbie real estate investors are able to buy these properties at well below market prices. These types of properties can be found in a wide range of places and can be listed in newspapers and periodicals as well as the web. In order to purchase a property the bidder must be present and the bidding starts at a minimum bid. Depending on your state, you may be charged a 10% non-refundable down payment at the time of purchase, or other such fee. A temporary certificate is given to the buyer at the time of sale until a deed can be prepared. This deed is normally prepared within 60 days of the action.
If the buyer of a property does not respond to the notification after about 30 days, then failure to finalize the purchase will result in the loss of the down payment. The property is then offered to the next highest bidder or placed back in action block for the next available action. All properties sold at these actions are sold “as is” and are conveyed through a quit claim deed.
These investment opportunities are easy to find and many websites produce lists of tax foreclosures. Contacting a Realtor is another useful way to find great deals. Make sure you investigate the properties as many of the properties are sold at absurd prices, and many of them need extensive work and repair.
First, you need to settle on a geographical location to search for these tax foreclosure properties. If it is not in your area, you’ll need to weigh the traveling costs. Get as many estimates you can of what the property is really worth and what the cost of repair will be. Do this before you buy. Make sure that you understand the rules involved in the auction as the rules can vary in each state.
Learn more about tax foreclosure properties. Stop by No Risk Investor where you can find out all about government tax foreclosure properties and how you can profit by them.
