Missouri Tax Lien Question

4 Replies

So this may be a dumb question, but I'm having trouble finding the answer or maybe it's just not clicking. I know in Missouri you buy the tax lien and the owner of the property has 1 year to pay it back plus simple interest on the amount owed and fees. What happens with the money that is bid above and beyond to purchase the tax lien? Does it go in an escrow account through the county and you're paid pack if they pay the delinquent taxes? Do you "forfeit" that money if you take ownership?

Matt,

You have the correct answers.

The county holds your money and returns it plus interest if the property is redeemed.

If property is not redeemed then your lien amount becomes what you paid for the property.

So don't ever bid more than what you are willing to pay for a property giving its condition and given that you will have a Tax Deed and not a general warranty deed.

In my state of SC the owner who lost the property can apply for the overbid or the amount you paid above what back taxes were owed.

This is where you need to know the specific laws in your area. I don't know if John was speaking generally or if he specifically knows Missouri law.  I do Not know Missouri law

What happens with the money that is bid above and beyond to purchase the tax lien? Does it go in an escrow account through the county and you're paid pack if they pay the delinquent taxes? Do you "forfeit" that money if you take ownership?

Generally what you bid is how much you are willing to pay  for the property in the event you acquire the property. Sometimes all that money is collected up front and usually, the amount above the lien, does not collect interest. In MD only some of that money bid above the lien amount is collected at the time of sale. When the owner redeems you get the money back. 

If you take the prperty you do not actually Forfeit the money, it is simply part of your purchase price. 

Notice I used qualifier words like Generally and Sometimes. You need to know the specific laws in your state. In some areas it can even vary by county.

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