How do you sell your tax deed properties?

16 Replies

I am a "newbie"  to the real-estate and sheriff tax deed sales. I've spoke with a few people and have read numerous articles about tax sale investing. I recently purchased two pieces at the last sale, Now my question is if you plan on selling the properties do you have to quite the title? What about owner finance with a quit claim deed? Once sold could the person in fifa sue and would make me responsible?  Thank you in advance for any kind of help!

Laws for Tax Deed/Lien Sale are state specifics, and there are a lot more info needed for your answers. 

Base on your profile location, I assume you brought the deeds in GA. Since the state is "hybrid" deed state which has one year redemption period. After the wait is over, a foreclosure of redemption rights or "barment" (another 45-60 days) - is needed to take possession of the property. However, the title is "cloud" - unlikely to get title insurance- ,hence "quiet the title", or "title service" is used to perfect it.

Where in the process you want to sell will dictate what needs to be done.    

Thank you, I am in Georgia and I hear of many people who just owner financing due to buyers unable to finance because of title insurance. After the year is up they forclose on the right of redemption then sell it owner financed.  I was trying to figure what all liabilities the seller would have? Also in ga is there a period of time where the clouded title would clear?

<-----Alabama

Selling a tax lien/deed is simple in my state. You can make up your own bill of sale & the county has a very simple transfer of assignment form to have the lien/deed assessed in the new owners name. No title company or lawyer needed.  You pay $5 at the tax redemption counter to have the transfer notarized and they assess it that day.  Takes no longer than 5 mins.  

Right now I only sell tax liens/deeds to other investors.  I am kinda cautious of selling liens/deeds to laymen as they tend to forget or not understand our state redemption laws.  I also do not sell them anywhere close to what the property is worth.  I couldn't see someone buying a tax lien/deed property close to what comps show without a clear title.  If I wanted to sell it for a fair market value I would have to wait out the redemption period and quite the title.

@Garrett Pohl  

Per GA O.C.A *48-4-48(2015) 

...

(b) ... A title under a tax deed properly executed on or after July 1, 1996, at a valid and legal sale shall ripen by prescription after a period of four years from the recordation of that deed in the land records in the county in which said land is located.

(c) A tax deed which has ripened by prescription pursuant to any provision of this Code section shall convey, when the defendant in fi. fa. is not laboring under any legal disability, a fee simple title to the property described in that deed, and that title shall vest absolutely in the grantee in the deed or in the grantee's heirs or assigns. In the event the defendant in fi. fa. is laboring under any legal disability, the prescriptive term specified in this Code section shall begin from the time the disabilities are removed or abated.
(d) Notice of foreclosure of the right to redeem property sold at a tax sale shall not be required to have been provided in order for the title to such property to have ripened under subsection (a) or (b) of this Code section.

However, I also have heard that title companies are simply refusing to work with this law. So we are back to square one. 

"Owner finance" is an option. Just wonder what would happen when the buyers seeking title insurance for themselves.

Taking this to another level, when the buyer becomes the seller (in future) - what would happen to the NEW buyer ? Will the tax-deed seller has any liability ?  

Originally posted by @Kiet N. :

@Anastasia Jordan

How do you advertise these sales ?

 I made connections with members here who do buy & rehab these  types of properties. 

Out of all my connections I separate them based on their buying preference: some don't deal with occupied units, some only want multi-units, some want rent ready, some do total rehabs, some don't want homes without a HVAC unit, some in certain neighborhoods.....lol only one so consider fire damage. 

Let's say you did a total rehab after you bared the right of redemption after the year is up. Are there any circumstances where the person FIFA could regain the property again?

Originally posted by @Garrett Pohl :

Let's say you did a total rehab after you bared the right of redemption after the year is up. Are there any circumstances where the person FIFA could regain the property again?

 I am not a lawyer and am not sure about GA laws and am barely functioning in interpreting the laws in my state for myself.........

From what I understand, to prevent that from happening you need to file a quiet title action as soon as the redemption clock runs out. The quiet title action is what prevents redemption, not marking off days on the calendar.  Still, in order to regain the property, they would have to reimburse you for expenses spent on the property (varies by state).  If such were to occur and they were granted the right to redeem you would still get your money plus more back,

Originally posted by @Kiet N. :

@Garrett Pohl  

Per GA O.C.A *48-4-48(2015) 

...

(b) ... A title under a tax deed properly executed on or after July 1, 1996, at a valid and legal sale shall ripen by prescription after a period of four years from the recordation of that deed in the land records in the county in which said land is located.
(c) A tax deed which has ripened by prescription pursuant to any provision of this Code section shall convey, when the defendant in fi. fa. is not laboring under any legal disability, a fee simple title to the property described in that deed, and that title shall vest absolutely in the grantee in the deed or in the grantee's heirs or assigns. In the event the defendant in fi. fa. is laboring under any legal disability, the prescriptive term specified in this Code section shall begin from the time the disabilities are removed or abated.
(d) Notice of foreclosure of the right to redeem property sold at a tax sale shall not be required to have been provided in order for the title to such property to have ripened under subsection (a) or (b) of this Code section.

However, I also have heard that title companies are simply refusing to work with this law. So we are back to square one. 

"Owner finance" is an option. Just wonder what would happen when the buyers seeking title insurance for themselves.

Taking this to another level, when the buyer becomes the seller (in future) - what would happen to the NEW buyer ? Will the tax-deed seller has any liability?

 I've read of several cases were a seller sold a tax-deed property to a non-investor who had absolutely no knowledge of tax-deed laws or what redemption even is and end loosing the house. Some times the seller doesn't even know what the laws are concerning redemption.  If I were to do owner financing for a tax-deed property I would have in my contract that the NEW BUYER would have to sign a statement saying that they met with a knowledgeable real estate lawyer and received counsel on this type of transaction.  

How long after receiving the tax deed can you start the procedure to quiet the title? (In Alabama) Do I have to get an attorney to do this and if so how much do they charge for quieting the title?

Originally posted by @Kiet N. :

@Anastasia Jordan

How do you advertise these sales?

UPDATE Y'ALL:  I decided to expand my advertising outside of the Bigger Pockets circle and posted on 2 Facebook groups and Craigslist.  I had people driving in from FL, GA, TN, and WI to see my tax lien properties that I have purchased and properties that I have applied to purchase from the state (we just call them "quotes" down here = contracts with the state that have a price locked in for 20 days).

Please tell me why I had a good number of THIRSTY WHOLESALERS contacting me trying to get my stuff under contract, who didn't have any money, and didn't have any buyers. Which was totally, totally, totally unnecessary as these properties were so cheap!  I sold my lien on a 3/1 for $2500.  Wholesalers were contacting me wanting me to put it under contract with them so they could make some money on top of what I was selling it for.  Several of them even took pics of my property and started advertising it for double.   One guy even asked if I would do a land contract......for $2500.

I explained to them that all this extra they were trying to do was pointless & if they didn't have CASH IN HAND they should not contact me.  I was also upfront about these just being tax certificates/deeds and they would not have clear title for 3 years and that redemption rights still apply and that this type of investment is geared more toward the buy & hold/rental portfolio/risk taking investor.  

Next go round I'm going to sell for more & specify no middlemen/wholesalers.  

Me> Meet me at the courthouse with cash.

"I need to get the property under contract to present to my cash buyers."

Me> No, you just need to bring me $2500.

"Um......."

Me> You don't have any money do you.

"I'm a wholesaler......"

Me> *click*

Originally posted by @Anastasia Jordan :

<-----Alabama

Selling a tax lien/deed is simple in my state. You can make up your own bill of sale & the county has a very simple transfer of assignment form to have the lien/deed assessed in the new owners name. No title company or lawyer needed.  You pay $5 at the tax redemption counter to have the transfer notarized and they assess it that day.  Takes no longer than 5 mins.  

Right now I only sell tax liens/deeds to other investors.  I am kinda cautious of selling liens/deeds to laymen as they tend to forget or not understand our state redemption laws.  I also do not sell them anywhere close to what the property is worth.  I couldn't see someone buying a tax lien/deed property close to what comps show without a clear title.  If I wanted to sell it for a fair market value I would have to wait out the redemption period and quite the title.

 Anastasia, do you have a copy of that form you could PM me. I've looked on the county site and could not find a transfer of assignment form. 

Thanks

There a number of ways to sell tax deeds.  It really depends on the market, the type of property and the price.

Typically we FSBO for a few months before taking on a Realtor. I would say 60-70% every year we are able to sell ourselves. We also direct mail all neighbors first before putting up a sign in the yard, especially if it is land.

If the price offered is less than $10,000 we most likely will not move forward with a quiet title.  We have sold property contingent on completion of quiet title, initiated by seller and once by buyer.  
Over $10,000 the buyer will want more assurances and quiet title is best to start.

Selling land contract is also very popular.  I don't mind the monthly payments and we charge low interest.  Also in my state you can get title certification after one year of holding tax deed, which is cheaper than an outright quiet title.  So, by doing land contract, you are holding the deed for 12 months and then the buyer can purchase that certification at the end of the contract.   We have even purchased it for one of our buyers at the end of the contract as a thank you for all the timely payments/great communication. 

I also suggest using Craigslist to post your properties and any other free means first.  I avoid wholesalers as much as possible, because they tie up the property and time.

If you deal with a lot of inventory, like us, I recommend making a simple website to refer potential buyers.  They may see something else they like more.

Good luck

Joe

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