Tax foreclosure auction

6 Replies

Hey BP Forum! Just went to my 1st tax forclosure auction to check it out. I am hoping for tips on how to get as much information on one of these properties before attending the auction. I basically want to know if there is any way to discover any outstanding debts that might be owed on the house or anything else that could come out and surprise me after I’ve purchased it.
@Angie Cook Timely post! I just spent the last 2 hours doing exactly this for an upcoming sale in my area. Your county will provide the tax lien info for the sale itself. As for other liens such as loans on the property, you’ll want to work with a title company. I have an arrangement with the title company I use for all my purchases. They charge me a flat $200 per search. So once I identify the properties I’d like to bid on, I give that list to the title company and they then tell me if any other debt is out there. After I purchase the property, they apply that $200 to the cost of my title insurance. Make sure you are aware of the timelines and current occupancy. Meaning, many of these tax sales still have the “owner” living / squatting in them. The deed transfer also takes longer than a usual sales (up to 90 days in my area). So this means I can’t legally enter the property until that deed is recorded at the courthouse. However, I use that time to file the eviction paperwork (if needed) to get the previous owners out.

Thank you so much, @Mike Dorneman! From what I learned today, the process seems pretty extensive and, if the deal is good, lucrative. I really appreciate the feed back. Good luck on your ventures!!

@Angie Cook welcome to BP.  The rules vary tremendously from state to state. Most importantly are you buying a Tax Lien or are you bidding on a tax Deed?

We have a lot of discussions here on BP about tax sales but I don't recall many about NC

@Angie Cook let me clarify. All tax sales (presuming we are taking about property taxes) are to see that back taxes are paid.  Since delinquent taxes are automatically a lien against the property it could be considered "an auction to satisfy the liens" as you said. 

However as a buyer, is some states you are buying a "tax lien" against the property, In some cases the auction is the last process of the city or county taking the property and they are actually selling a "tax deed".  You are actually buying the property at the tax sale in the second case. 

That is a greatly simplified version. In some tax deed states the previous owner may have a period of redemption where they can pay you back with interest and get the property back. In most tax lien states you can foreclose on the lien if the owner does not eventually pay. That process may take a year or more. 

Because the rules can vary so much it is important you know the rules and how they affect your investment. The best source is often you county website. It can be difficult to find the information and may be two or three layers deep in the site.

@Ned Carey Yeah, I am definitely discovering the complexity of it and out county site is just not that helpful. I am going to reach out to a RE attorney contact I have and see what she can tell me. The auctioneer said that he was auctioning off the deed. The owner seems to have pretty extensive history with the registrar of deeds and I just am wanting to be sure there are no other liens out there. Thank you for the information. It has been really helpful!