Tax lien states - apply for deed or lawsuit?
For Tax Lien States....
After the redemption period expires, do you apply to the county treasure for a deed? I know some tax lien states do it this way, just not sure how many.
In Louisiana we do it differently. No deed is issued. When the redemption period is over we have to file a law suit to confirm the tax sale and quiet the title. The property owner has six months to act, which their only option is to try to annual the tax sale which pretty much their only defense is improper or lack of notice. We never end up with a deed, what we have is a judgement confirming the tax sale. Our suit to quiet title removes any liens, mortgages against the property.
So keep in mind, you hire an attorney and have to pay him to handle the lawsuit and there is court costs. If the owner can not be found or served than an ad hoc attorney will be appointed to defend them (This cost you an additional $500). If there wasn't adequate noticing, there may be more curative work for additional noticing. If they contest the suit, it will get more costly. You can always try to negotiate a settlement with them (quit claim). If they try to fight it, it will cost them thousands of dollars in legal fees as well and no matter what they still have to pay back all the past due taxes.
When I bid on properties in Louisiana I wont bid on anything with a low value, example $5,000.00. You could end up spending that much just to get through the legal process if it is not redeemed.
States that issue the deed for you for a couple hundred dollars seem a lot more attractive than the process we have to go through.
How does it work in your state?