Texas Tax Sales: A Beginners Tale

This absolutely drives me nuts. At least 2-3 calls a day at my office goes like this....

Ring, ring.

Me-"Thank you for calling xyz tax office (omitting actual office name), how may I assist you?"

Caller-"Hi, I'm a serious investor, and I would like to learn more about buying your tax deeds over the counter?"

STOP!!!! 

Ok, forgive me, I'm going to be harsh for my first blog, and hopefully educational at the same time. 

If you were truly a serious investor, you wouldn't have allowed yourself to be scammed out of whatever money you paid to be given a script for Idaho! Yes, it is very telling that you bought the infomercial hype and paid for a program that I truly believe has worked to make you the serious investor sound DUMB right out the box.

I understand that you are learning, and just want to empower yourself to succeed, which I am more than willing to aid you in finding the correct path.  You want to make money, I get that, who doesn't? So, let's start over from scratch.

Whatever course you bought, set it aside. The authors are clueless about TEXAS property taxes, tax foreclosures, and the sale process. They didn't do their homework, and it's evident that you relied upon them to help you cheat just a little.  

The state of Texas has 254 counties that services 22,000,000+ residents. In the 254 counties, there is approximately 300 registered tax collectors (RTCs). That means there could be each month over 200 tax sales across the state, each conducted entirely different from the other. Not all counties will hold a tax sale each month. However, one thing remains a constant in these sales, the Texas Property Tax Code. 

The Code, has express provisions on when, where, how and by whom the sale must be conducted by. The differences fall within the interpretations of the code. 

When is set in stone and will not change, the first Tuesday of each month at 10am sharp. Unless this date falls on January 1st, July 4th or there are not any properties available; then the tax sale is postponed until the following month. 

Where is set by the code, to be held on the county courthouse steps. This is when interpretation kicks in, because the code doesn't specify which steps at the courthouse. Dallas County holds theirs on the steps to the basement. Tarrant County holds theirs on the outside East Lawn steps. Get the idea.

All, tax sales must be held by public auction in the state of Texas (this is how). They must also, be conducted by the county constable.

Now that I've covered basics that make it painfully obvious the caller was misinformed and caused to sound dumb over the phone. Let me assist you in covering the details that may aid you in actually becoming a "serious investor."

1. You must register with the Tax Assessor Collector of the county in which you wish to participate in the tax sale (TPT code: 34.015). This is to verify that you DO NOT OWE DELINQUENT TAXES, to that county. The fee to register is $10.00 cash or check.

2. There is a list of properties up for auction. Each county has different policies on how they are distributed. Some charge fees for the copies while others do not.

3. (Sorry bold is stuck) You must do your own research. Tax offices are already under staffed and overworked. They do not have the man power to do your lien or title searches. Most offices will show you where to obtain the information, but don't ask for much more than that, you won't get it.

4. Visiting properties and owners before the sale is acceptable, as long as you do not break laws (ie: trespassing). You may even buy the property direct from owners before the sale. Doing this, doesn't remove the property from the sale, Paying the taxes will.

5.  Properties not sold at auction, do not get auctioned at the next sale. You snooze, you don't necessarily loose. The properties are struck off to a taxing authority. That authority can either direct sale, auction or hold any of these properties (they become the new owner). 

6. Only real property is sold....This is false! Mobile Homes, can be considered personal property and be sold on the courthouse steps. Smaller counties may do this to help lower their expense associated with the sale.

7. Payment is generally due at the time of sale, and is generally made in cash, cashiers checks, or money orders. Take various denominations as the constables do not make change, and will only accept exact amount.

8. Bidding is verbal, there isn't anything silent about the auctions. It is after all held for the public. So don't be timid, as he auctioneer may not hear your bid, and you could lose a property. This has happened more than once, and there is no recourse for it.

Recommendations: watch an auction or two before you participate. They are open to the public. You will also notice that bank foreclosure auctions go on at the same time and place. It offers a great opportunity to ask people questions who make a great living dealing in tax foreclosures.

Sorry this was so long, needed to rant a little to make my point. Next I will cover some examples of winning and losing Texas tax auctions.