Purchasing property that's pending a tax deed auction

11 Replies

Yes I believe so.

Properties listed for auction up to the day before would suddenly disappear. I was told that the owner paid the taxes at the 11th hour.

Yes you pay the taxes (and any legal fees already incurred) and the tax lien goes away as does the future auction.

Just be sure to do your due diligence prior to buying. People unable/unwilling to pay their taxes often have code violations/liens as well as other liens attached to the property.

yes, pay the taxes and the house usually comes off the auction list. check with the municipality. they may allow you to make a payment agreement. i personally have bought 2 houses that were ready to go to auction by making a payment agreement with the tax authority. then, you are paying out a small amount every month as opposed to a large amount all at once. 

@Mark Elliott is the payment agreement something that is typical or do you have to speak to a special department to enter into one. I'm working on a property but the tax bill is so expensive I can't take it down myself. But it's a commercial property so it's still a great deal

@Mark Elliott is the payment agreement something that is typical or do you have to speak to a special department to enter into one. I'm working on a property but the tax bill is so expensive I can't take it down myself. But it's a commercial property so it's still a great deal

@Jay Helms  

Make sure that you are paying ALL the back taxes not just one year.  Usually if one year is delinquent, more than one year is delinquent.  Do a full title search to make sure there are no other obligations against the property like, mortgages, liens, judgments , Federal Tax liens, nursing home liens, state tax liens (business, personal or inheritance).

some municipalities do not offer a payment agreement. i am sure each has their rules on how to do it if they offer it. here, all you have to do is go into the city hall treasury department and ask. they set up what they need down, which is usually 25%, then they set up the agreement based on the remaining and the length of time they will allow. one firm rule is that you have to keep up the current taxes along the way as well. usually, they will let you do the agreement on ALL passed due years, but some cities may have restrictions on what they will allow. you need to go in to city hall and ask. you never know what they may do for you. 

This comes down to your title search people and closing attorney to get right. Your closing team has a responsibility to ensure that you receive an unencumbered title when you close. It's no harm to second guess, but they should have answered these questions for you specifically and if they can't, you probably picked the wrong people to work with. 

Hypothetically speaking, of course!

@Jay Helms  when you purchase property the taxes will be paid in full on the hud up to the date of the closing and pro rated for the current year.  Since the property has changed ownership with all taxes current there will be no auction. If the owner can not pay them the proceeds on the sellers side will be payed out to the appropriate claim holder. So you will have clear title at closing.

Originally posted by @Jay Helms :

Hypothetically speaking, if I purchase a property for cash and that same property is slated for a tax deed auction in a couple of months, how do I go about having the tax deed auction cancelled? Is it as simple as paying the back taxes?

Yes. That simple.