Tax Lien vs Mortgage Foreclosure/Auctions

4 Replies

Which is better? To me I would think Tax Lien properties? There are tons in my area that appear in good condition. In my county they also give you a time frame before putting down the 10% deposit after auction to get title checked. This seems less risky, am I thinking of it correctly?

From what I can tell tax lien sales are better as far as not having hidden surprises like finding that their are other liens on the property after the sale, but as long as you have some time to do your due diligence either one should be a good way to get a good deal on a property. Just make sure you don't get auction fever and bid past what you calculate as your max bid going into the auction.

Originally posted by @Chelsey Jimenez :

Which is better? To me I would think Tax Lien properties? There are tons in my area that appear in good condition. In my county they also give you a time frame before putting down the 10% deposit after auction to get title checked. This seems less risky, am I thinking of it correctly?

 I am shocked that they give you the option to do due diligence after the auction. I would seriously question if you have correct information about that. In general I believe tax auctions to be safer and less competitive than mortgage auctions. 

It is key to know the rules in your state or county as to how the run the auctions and the foreclosure rules. The rules can have a dramatic affect on your returns and your strategy. However knowing the rules can put you in a very good negotiating position when doing deals with a tax foreclosure.

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

Thank you everyone, I really appreciate all the input. My husband will continue to go to the auctions and ask questions. The last time he went is when a representative from auction.com told him about the due diligence after the auction so I will have him double check on that :)

In referring to auction.com, you are dealing with a REO most likely. Not a tax lien, and likely not a foreclosure auction. The best $200/$300 you can spend is to sit down with a local RE attorney. Tax lien and tax deed auctions are much More complicated than mtg foreclosure auctions.

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