Government tax foreclosure sales give you access to dozens of homes that have been foreclosed. When an abundance of foreclosure properties exist, such as the case at the present time, great deals can be found at reduced prices. Prices are reduced because there are so many foreclosed homes in the market now needing owners. Also, some of the properties may need a little ?fixing up. ? These are the times to take advantage of tax foreclosed properties owned by the government because you end up getting so much more value for the price you pay.
Know the circumstances surrounding the sale
You should be aware of a few things as you prepare to attend a government tax foreclosure sale. The more information and knowledge you have about the foreclosed property you want to bid on, the better your chances of making a wise choice and sound investment.
Two types of basic tax foreclosures
1. There are basically two types of tax forecloses: a lien and a deed. With a tax lien foreclosure, you are buying the rights to tax the lien on the property. Once the tax is paid, the homebuyer owes you the money that kept him from foreclosure. In this type of tax lien, you are allowed to charge upwards of 18 percent interest or more for paying the tax lien. If you can?t recoup the money from the homebuyer, you can foreclose and the property will be yours. With a tax deed foreclosure sale, you are purchasing the rights to the entire property. A tax foreclosure sale is generally considered a win-win situation if you are aware of all the facts in the case.
2. Arm yourself with as much knowledge as you can about the property you are interested in purchasing before you bid on government tax foreclosure sales. Many times you won?t be allowed to see the interior of the foreclosed home before placing a bid at a public auction. Visit the County Clerk in the region the property is located, and also the County Tax Assessor, to try to determine as much about the value of the home as possible.
3. Know the laws, rules, and regulations governing the auction as each state and county can have different subtleties to procedure. Listen closely at the auction because anything that might have changed recording the tax sale should be announced before the auction.
4. Physically examine the property, if you can ? the exterior (if not the interior) and the surrounding neighborhood. Talk with the neighbors, if possible, and gather as much information about the history of the property as possible.
5. Visit a title search company and ask what information they can provide you. You will want to get the names of all persons on the title to prevent future problems.
6. Try to find out if there are any liens on the property and try to determine if there are any extra unknown debts against the property that you might be liable for.
7. If you are the winning bidder, you must be prepared to pay cash (or have a cashier?s check) for the amount of the winning bid, plus any other incidental fees such as auction percentage costs and recording fees. Typically, a transaction must be concluded in full by the end of that business day.
8. Get a good description of the land as it is specified on the deed. Try to discover if any portions of the land from the original deed have already been sold and, thereby, would not be included in your purchase.
9. Government auctions will provide information services to you as a member and will give you access to hundreds of listings in your local region and across the country about upcoming government auctions. You may be able to find detailed information about the property on an internet web site, as they tend to collect a lot of information in bulk on available properties. The price of membership is $39.95 annually.
10. Real estate agents can be a wonderful source of information. Generally, they know the local areas they serve well and could provide useful data in answering your questions.
If you are well-prepared with as much knowledge as you can possibly find about the circumstances of the government tax foreclosure sales you are interested in, you should walk away a winner.
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