How Do You Buy Tax Delinquent Properties?
How to Buy Delinquent Tax Properties?
Buying tax-delinquent properties can be a significant investment in real estate.
Not only can you potentially purchase a property at a discount, but you can also help the local government by paying off unpaid property taxes.
Here’s how to buy tax-delinquent properties.
Research tax delinquent properties
The first step in buying tax-delinquent properties is to research them. You can start by contacting the county treasurer’s office.
They can provide you with a list of tax-delinquent properties in the area. You can also look online for tax sale listings.
Once you have a list of potential properties, research them thoroughly. You want to know as much as possible about the property before you bid on it.
This includes the property’s location, size, condition, and outstanding liens or judgments.
Attend the auction
Tax-delinquent properties are typically sold at auction.
You’ll need to attend the auction to bid on a property. Before the auction, register with the county and bring all the required documents and funds.
During the auction, have a bidding strategy in place. Determine your maximum bid ahead of time and stick to it. Avoid getting caught up in a bidding war and overpaying for a property.
Purchase the property
If you win the bid, you must pay for the property and transfer the title. Make sure you have the funds available to pay for the property.
You may be required to pay for the property in total during the auction.
After you’ve purchased the property, address any outstanding issues.
This may include paying off any additional liens or judgments and making necessary repairs to the property.
How do I find tax-delinquent properties in my area?
Here are the steps to find tax-delinquent properties in your area:
- Contact your county tax assessor’s office. They will have a record of properties with delinquent taxes. Ask if you can access a list of outstanding properties or tax sale files. Some counties make this information publicly available online.
- Check your county treasurer’s office website: many counties have post-tax sale lists, auction notices, and other information about properties with delinquent taxes.
- Look for notices of upcoming tax lien auctions or tax sales in your local newspaper. This is usually how counties advertise available tax-delinquent properties. Even if the auction has already happened, the notices may contain a list of properties.
- Attend upcoming tax lien auctions or tax sales. This is a great way to identify properties with significant tax delinquencies. The county will auction tax liens or deed rights to the properties to recover unpaid taxes.
- Contact a tax lien investor or tax deed purchaser in your area. They often research and compile lists of tax-delinquent properties as part of their business. They may be willing to share information or sell you leads on properties.
- Hire a property tax researcher to find tax-delinquent properties for you. This can be a faster option if time is limited and you don’t want to do the legwork yourself.
What are some common issues with tax-delinquent properties?
Here are some common issues with tax-delinquent properties:
• Unpaid liens and judgments – Properties with severely delinquent taxes often have other unpaid bills like homeowners association fees, utility bills, and even liens or judgments against the owner. These will need to be researched and paid off.
• Title issues – Long-term tax delinquency can sometimes cause challenges in proving clear property ownership. The title may need to be corrected or cleared.
• Property condition issues – When properties go long periods without maintenance due to non-payment of taxes, they can fall into disrepair. Issues like deferred maintenance, damage from lack of utilities, and code violations are common.
• Legal entanglements – The current owner may be dealing with legal issues like bankruptcy, divorce, probate, or other litigation that prevented them from paying taxes but could impact the property.
• Vacancy – Tax-delinquent properties are often vacant, raising the potential for squatting, break-ins, and deterioration.
• Neighborhood decline – In some cases, tax delinquency can be a symptom of broader neighbourhood issues like high vacancy, blight, and crime that impact the area.
• Challenges evicting occupants – If the tax-delinquent property has occupants, they may be difficult to evict legally, especially if they have lived there for an extended period.
• Unpermitted improvements – Occupants sometimes make improvements to the property without proper permits, which can cause complications.
• Potential environmental issues – Long-term neglect raises the risk of the problems like mould, lead paint, asbestos, and other environmental hazards.
FAQs
What are tax-delinquent properties?
Tax-delinquent properties are properties that have unpaid property taxes. The local government places a tax lien on the property sold at auction if the taxes are not paid.
How can I find tax-delinquent properties?
You can contact the county treasurer’s office or look online for tax sale listings.
How do I bid on a tax-delinquent property?
You must attend the auction in person and register with the county. Have a bidding strategy in place and stick to your maximum bid.
What happens if I win the bid?
If you win the bid, you must pay for the property and transfer the title. Make sure you have the funds available to pay for the property.
What if there are liens or judgments on the property?
You’ll need to address any outstanding issues, such as paying off liens or judgments, after you’ve purchased the property.
