how to buy a tax foreclosure property

The sale drew ire from many at the auction, who had shown up only to have all the properties gone in a matter of minutes.One Canadian investor said the county’s decision was puzzling, as his company had spent weeks preparing a much higher bid. reports Bill McMachen, a businessman and former yacht dealer, paid about $4.8 million for all 650 tax foreclosed properties at Macomb County’s July 31 sale.
He says he has been flooded with emails since the auction with offers to buy some of the properties, and he can offer potential buyers some perks the county would be unable to.
–  A Michigan millionaire decided to go into the business with a bang last week by buying every tax foreclosed property offered at a recent county auction.
Outdated state laws that allow local governments to sell tax liens on delinquent properties to investors in order to more quickly collect on overdue property taxes is sparking a second " crisis," a report from the National Consumer Center said Tuesday.
Not all homes going on the auction block schedule an open house for potential bidders to inspect the property, but, according to, the outside appearance of a home is normally a fairly accurate indicator of what you will find on the inside; a house that looks well-cared-for on the outside is usually well-maintained inside.
Usually, a sale is held by public auction at the courthouse in the county where the property is located; sometimes the auction takes place on the property itself.
Check assessed values and sales prices of similar properties located in the same neighborhood for the past three months; this will give you an idea of the rate of real estate appreciation in that area.
A tax foreclosure sale occurs when a government taxing body places a tax on a property for unpaid taxes.
Certain liens may take priority over the real estate lien.
If you buy the property at auction, you will be responsible for satisfying any other liens placed against the property.
Tax foreclosure houses are sold by county governments and the Department of the Treasury's Internal Revenue Service when homeowners don't pay their property taxes or income taxes, respectively.
“Do your homework before you come to the auction, what you may think you are purchasing might not be the same as what you end up with,” Jackson County Treasurer Karen Coffman said.
Terrence Hill purchased the property at the Jackson County Tax Sale in September 2012.
JACKSON, MI – The Jackson County Treasurer has one piece of advice for those looking to bid on a parcel at the county foreclosure tax sale: Buyer beware.
It is suggested that bidders obtain professional assistance from land surveyors, property inspection companies and the respective assessors office.
“Make sure they (city) are not going to knock it down," Marty Spaulding from Title Check told bidders last year.
As the taxing agency of the federal government, the Internal Revenue Service has complete power to record a tax lien against real and personal property owned by delinquent taxpayers as security based on income taxes owed.
When a homeowner fails to pay their federal taxes, the Internal Revenue Service will issue a Notice of Federal Tax Lien, which outlines the amount owed in taxes to the government, plus additional fees and associated costs.
A tax lien is essentially a debt owed on unpaid property taxes, income tax debt or other local, state or federal taxes that go unpaid, but tax liens are most commonly associated with unpaid federal taxes.
A lender only requires a termite inspection to check for physical damage from termites and a flood certification that determines whether the buyer needs federal flood insurance when the house is in a floodplain, but these are different than a home inspection, says Goldstein.
When a bank takes a property from a homeowner involuntarily, the home can be sold at a public auction 90 days later, says Erin O’Connor, real estate agent with RE/MAX Excalibur.
In addition to a home inspection, a title search on the property will determine whether the property has other liens by lenders that haven’t foreclosed or if property tax is owed, says Blomquist.
When looking for a home in a particular market, Daren Blomquist, vice president at RealtyTrac, advises buyers to research sales prices, the number of foreclosures in the area, school districts, and amenities such as restaurants, shops, and the proximity to landmarks like a beach or mountains, all of which impact home values.
“You can get a great bargain but it needs more repair, and the FHA loans give you more money to help fix up the property,” Blomquist says.
“The Federal Housing Administration Section 203(k) program is great for foreclosed home buyers,” says Blomquist.
“Once a property is bank owned, it’s a standard timeframe purchase,” says O’Connor.
“You need contractors to bid on the house, and these bids are given to the appraiser who provides a value of the house before and after it’s rehabilitated,” says Farley.
Each state has a different timeline for the foreclosure process, and buyers have opportunities to purchase a pre-foreclosure or foreclosed (real estate owned (REO) or bank-owned) home during different parts of the process.
And don’t let the name fool you: “The short sale process can take three to six months because banks are overwhelmed,” says Farley.
“You go to the property before the auction and, if it’s vacant, look through windows,” he says.
If the property doesn’t sell at a public auction, the bank takes ownership of the home with the intent of reselling it on the market, according to RealtyTrac.
Since the government is only looking to raise enough from the sale of the property to cover the loan debt, and has not financial interest in whether the property sells for its full market value, buyers can very often find majorly discounted tax lien homes for sale.
This essentially means that the government has the legal right to impose a lien on a tax debtor's property (tax lien certificates), which gives them the legal basis for eventually repossess the property and selling it through an auction if the tax debt continues to go unpaid.
Tax lien foreclosures are properties that have been repossessed and put up for sale due to a tax debt owed to the government by the previous owner.
While formerly only professional investors and buyers in the know were able to find tax lien home sales in time to attend them and bid on property, online listings services such as have leveled the playing field for the every day home buyer or investor by making updated listings available to the public.
Once you know how to buy and you're armed with foreclosure lists, you don't have to worry about wasting time with tax lien search, all a home buyer has to do to win a tax deed property sale is attend auction and bid.
18,910 Detroit properties owing more than $265 million in unpaid property taxes are careering towards this year’s Wayne County Tax Foreclosure Auction.
An extra word of advice from HuffPost: if you’re thinking about buying a house at Detroit’s foreclosure auction for the first time, first read a little about some of the hidden costs of the city’s bargain homes and larger problems with buying foreclosed property in Detroit.
For months, he said, the council has been calling on city staff to provide strategies for dealing with foreclosed properties other than just handing them to the highest bidder, hoping for the best and often getting the worst.
This morning, the Dallas City Council reluctantly earned about $1 million for City Hall through the sale of 140 tax foreclosed properties around the city.
I say reluctant because, for months now, southern Dallas council members Tennell Atkins, Dwaine Caraway and Carolyn Davis have been angry about the way the city rids itself of these less than prime pieces of real estate.
Our City Hall reporters and other Dallas Morning News writers and editors provide in-depth features, breaking news and offbeat tidbits through lively coverage of Dallas government.
The winning bidder purchases the deed to a piece of property, becoming the new owner and obtaining all rights to the property – clear of any mortgages, liens, deeds of trust, etc.
As with any real estate investment, we recommend that you thoroughly research the property involved in the tax deed sale beforehand to minimize the risks.
Because property taxes are a small percentage of market value, investors purchasing a tax deed can acquire full property rights at a fraction of the market price.
During a tax deed sale, the property is usually sold for the back tax amount plus any fees, interest charges, and court costs.
If a homeowner fails to pay the required taxes on his or her property, the county will offer the property up for sale at an auction to help generate the lost tax income.
yes, you pay the back tax,s and any outstanding utility's,but be aware if the home is still in the delinquent tax payers name, some states require you to give the original owner a set time period to repay you,before finely ownership is turned over to you, you need to check with the town or county where the property is will want to find out this information before you put your money.
All you have to pay is the property tax light, water… and the house is legally yours? Has anyone else heard about this, is what I been told accurate? Where else can I find out about this type of sale my self, Thanks for your help.
I was told you can buy a house at one of these government tax foreclosure sales for about $600, and the house is worth a whole of alot more like a house of the value of $180,000.
With declining values, bad mortgage choices, etc you can purchase a property that has more owed on it that it is worth (negative equity).
The County may try to sell the Tax Title Properties at some future date after the foreclosure sale.
Most people bring a cashier’s check made payable to King County Treasury for the maximum amount they are willing to spend, whether they intend to buy just one parcel or bid on several.
However please note King County Treasury will not provide cash refunds to parties during or after the auction, to offset cashier check overages.
Normally, owners of improved properties subject to tax foreclosure will raise the money to redeem the property before the sale, often at the last minute.
Properties not sold to the public at the auction are sold to King County.
As real estate taxes are in the first lien position, the tax foreclosure extinguishes all other encumbrances including but not limited to Deeds of Trust, mortgages, contracts, liens, judgments and any similar items.
In 2014 the properties subject to foreclosure are those on which the 2011 full year tax is delinquent.
No King County Employee or officer, or person who is an immediate family member of and residing with a King County employee, may bid at the sale, nor may such person bid as an agent or allow any agent to bid on their behalf.
The list mentioned in #2 shows parcels in numerical order by tax account number which, in turn, derives from the alphabetical order of the plat name or from the Section, Township and Range if the property is unplatted.
Parcels may be redeemed from foreclosure at any time up to the day before the auction, thus we do not know what will be in the sale until the morning of the auction.
The map does not show the topography such as ravines, hill, slopes, etc., nor does the map show what is on the property (dense growth, swamp, boulders, etc.). Some properties may be private roads covered by easements for ingress and egress.
The Summons and Notice, which includes a list of the properties, will be published in the Seattle Times classified (legal) section sometime in late October after all our certified mail notifications are completed.
Every year people who have done little or no research or who do not know how to read a legal description buy properties that, to them, are totally useless.
Checks are made payable to the King County Treasury.
Why would anyone be interested in buying a property at auction? Auctions offer a first chance to snap up certain properties, so in theory, some of the best properties get purchased at auctions.
Auction properties aren’t always great deals, but the potential to get a great deal is such a big draw that, for many people, it compensates for the numerous potential drawbacks of buying an auction property.
Auctions can be a riskier way to purchase a property than buying a property through a real estate agent, so it’s important to be extremely well-educated about the process and about the properties you are interested in bidding on.
The other main way a home ends up at auction is when the owner doesn’t pay property taxes or becomes severely delinquent on state or local income taxes.
Winning bidders will pay any auction fees and/or bidding fees and put down an earnest money deposit on the property they are purchasing before leaving the auction site.
Bidders at property auctions are often real estate investors who can afford to pay cash, but for auctions that allow financing, it is best to get prequalified ahead of time.
Bidders can avoid this problem by working with an auction house to ensure that the property has clear titles.
If a property winds up at auction, it means the owner was having financial trouble, so the house may have deferred maintenance problems.
If the property contains a structure, please be advised that if the building is considered substandard, once the City conveys the deed to the buyer, the buyer will have 90 days to repair or demolish the structure.
The Real Property Division manages city fee-owned and tax-foreclosed properties.
When the city has tax-foreclosed properties for sale, a list will be posted with the minimum bid amount.
A list of tax foreclosed property in the city’s inventory that is available for sale can be found at the link to your right.
The City of Fort Worth is the trustee of properties for all tax entities who were a party to the tax foreclosure.

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