Tax Deed Sales

2008-05-13 11:38:48

( Legal )



Requirement to Pay Realty Taxes

Every homeowner needs to pay real estate taxes every year. When you don't pay your real estate taxes, the government will send you notices about it. When you still don't pay after being notified a few times, the government can then file a case against you and confiscate your property. Your home is then auctioned through a tax deed sale.

How a Tax Deed Sale Works

Once the court has ruled that the government can confiscate your property due to your non-payment of real estate taxes, your home will be put up for sale at either a private or public auction. The government does not need you to submit a deed of assignment for it to be able to execute the tax deed sale.

The minimum bid price of your home is equivalent to the cost of selling as well as all the back taxes and their interest charges. The home will be sold to the highest bidder just like in a regular auction.

The Redemption Period

Some courts may allow you to reclaim your property and provide a redemption period where you can pay the minimum amount bid plus penalty charges. Redemption periods may be anywhere from a few months to a year, depending on the state where the property is located.

Redemption periods may coincide with the actual sale to a bidder, so the new owner is cautioned not to make any improvement first until the redemption period has expired.

Buying a Home in Tax Deed Sales

As a home buyer, you might be able to find some great house deals during a tax deed sale. Opening bid prices are extremely low and are only a fraction of the actual market value the home could be sold for by realty companies. Chances are, there may be no other bidders and you can easily get the home at a bargain.

Precautions for Buyers of Tax Deeds

For one, the title to the property is not insured, and the previous owner can still have a chance to recover it during the redemption period. You would have to wait until the redemption period has passed and you need to be sure that there has been no attempt by the previous owner to settle his tax liabilities.

You should carefully inspect the property and its premises for any damage that may be difficult or very costly to repair. The previous homeowner may have deliberately neglected to pay taxes, interest and penalties for a variety of reasons. It is quite possible that he might inflict some damage to his home since he knows he will lose it.

As with any property, you should research the background of the property under tax deed sale. Be sure that you know exactly what you are paying for, as well as the risks involved.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.