What are the potential risks in tax deed sale ?

Question

1. What are the potential risks when a person decides to buy a tax deed property ?

2. How important to read and understand a title report before buying a tax deed property?

Anastasia Jordan · Answer

1. Fire or natural disaster before insuring the property. A judge voiding the tax sale after you put $$$ into it.

2. The title would only be insurable after quiet title action.

Carrie Sun · Answer

Thank you Joe for your detail and informative response. I would like to continue my question:

1. What kind of risk factors would cause a tax deed buyer loses his total amount of tax deed purchase after the tax deed auction sale?

2. If buy and hold a tax deed property, would the title of the property be insurable after 7 years?

Joe Mclain · Answer

1. I think one of the risks is purchasing a property that no one wants to purchase. IE, a ditch, a road, a power company right of way, etc. next risk is not understanding what you have. Do I have title? Do I have federal liens, city liens, etc that the buyer is responsible for paying. Next, is understanding the laws of the state. So I buy a tax deed, but in state like GA, I have a 1 year right of redemption. So I am sitting on this property until the redemption period is over before I can flip it.

2. I think it is extremely important to understand who has title and if there was a break in title. Not that you have to run a title report but you need to know what will be on the title report by doing your research with the county.

joe

2. I think it is extremely important to understand who has title and if there was a break in title. Not that you have to run a title report but you need to know what will be on the title report by doing your research with the county.

joe

What are the potential risks in tax deed sale ?

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