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Somebody fully explain how buying property with delinquent taxes works
Posted on 4/12/17 at 12:22 pm
Posted on 4/12/17 at 12:22 pm
There is a tax sale taking place next month in a local town. Some decent properties listed. If I was interested in going to city hall on the sale day, what is the exact process? Do you pay the delinquent taxes and become owner of the property? Does the property owner have the opportunity to recoup the property after it is purchased? Learn me something O-T
12
Posted on 4/12/17 at 12:25 pm to Bayouboogaloocrew
It may take a while to get a response, but the Money Talk is probably your best bet for an accurate answer. 
Posted on 4/12/17 at 12:26 pm to slackster
quote:
the Money Talk is probably your best bet for an accurate answer.
Posted on 4/12/17 at 12:27 pm to Bayouboogaloocrew
you will be met at the courthouse by a representative of the mortgage company that will ensure you are not the high bidder. Or a family member if the home has no mortgage.
Posted on 4/12/17 at 12:27 pm to Bayouboogaloocrew
Every state is different. You may want to start by looking up the regulations or you will likely be throwing money into a hole. You can't ask for refunds and better know the ends and outs of each property before throwing money at them.
This post was edited on 4/12/17 at 12:28 pm
Posted on 4/12/17 at 12:28 pm to Bayouboogaloocrew
A professor I work with does this. It seems very low risk but takes some leg work. The biggest thing to worry about is having plenty of cash to cover the taxes.
LINK
LINK
Posted on 4/12/17 at 12:37 pm to Bayouboogaloocrew
"Typically" when the sale is made, the tax bill is paid first, then the "owner" gets the rest.
Posted on 4/12/17 at 12:38 pm to Bayouboogaloocrew
quote:
There is a tax sale taking place next month in a local town. Some decent properties listed. If I was interested in going to city hall on the sale day, what is the exact process? Do you pay the delinquent taxes and become owner of the property? Does the property owner have the opportunity to recoup the property after it is purchased? Learn me something O-T
They have 3 years after tax sale to redeem the property. Also there will be subsequent tax sales if they continue to not pay - you buy it in the 2013, they don't pay again it goes to tax sale in 2014, they don't pay again it goes to tax sale in 2015.
The lendor will most likely eventually redeem the taxes if necessary in order to not lose collateral.
honestly not sure what happens after those three years pass though.
- Sherrif's sale is something different for properties which are foreclosed on.
This post was edited on 4/12/17 at 12:41 pm
Posted on 4/12/17 at 12:40 pm to Sneaky__Sally
quote:
They have 3 years after tax sale to redeem the property. Also there will be subsequent tax sales if they continue to not pay - you buy it in the 2013, they don't pay again it goes to tax sale in 2014, they don't pay again it goes to tax sale in 2015.
It varies by jurisdiction. Some states have 12 month redemption periods. Some states have several years during which a property owner can redeem a tax lien. Hell, in some states it varies between counties and/or cities.
Posted on 4/12/17 at 12:41 pm to Sneaky__Sally
quote:there are different laws in every state. OP needs to see if he's in a deed or lien state.
They have 3 years after tax sale to redeem the property. Also there will be subsequent tax sales if they continue to not pay - you buy it in the 2013, they don't pay again it goes to tax sale in 2014, they don't pay again it goes to tax sale in 2015.
Posted on 4/12/17 at 12:42 pm to GeauxColonels
quote:
It varies by jurisdiction. Some states have 12 month redemption periods. Some states have several years during which a property owner can redeem a tax lien. Hell, in some states it varies between counties and/or cities.
Oh well, I am pretty sure its mostly three years where I work but could be wrong. I just have to report that the property taxes have not been paid and it has been sold at tax sale so never looked further into it.
What happens after the redemption period is up? You just own it? What if multiple people have acquired the "rights" for the same property in different years?
This post was edited on 4/12/17 at 12:44 pm
Posted on 4/12/17 at 12:43 pm to GeauxColonels
quote:
Some states have several years during which a property owner can redeem a tax lien.
Some states also require the delinquent tax payer to pay interest to the person who paid the delinquent taxes during those years as well as the delinquent taxes.
Posted on 4/12/17 at 12:45 pm to weadjust
quote:
Some states also require the delinquent tax payer to pay interest to the person who paid the delinquent taxes during those years as well as the delinquent taxes.
I think that is common plus marketing fees and other stuff tot the county for the property going to tax sale.
Posted on 4/12/17 at 12:45 pm to Sneaky__Sally
quote:
What happens after the redemption period is up?
Again, depends by jurisdiction, but typically that's when a foreclosure filing can be made. Of course, I'm simplifying the process significantly.
quote:
Some states also require the delinquent tax payer to pay interest to the person who paid the delinquent taxes during those years as well as the delinquent taxes.
Yes, very common. Some states charge an interest rate while others have a penalty that's charged. As a tax lien purchaser, you're entitled to the interest or penalty earned on the lien when the lien is redeemed.
This post was edited on 4/12/17 at 12:47 pm
Posted on 4/12/17 at 12:46 pm to meauxjeaux2
quote:
you will be met at the courthouse by a representative of the mortgage company that will ensure you are not the high bidder. Or a family member if the home has no mortgage.
This
i went to a sheriff auction once to see how the process went. a rep from the mortgage ALWAYS bid until it got to a certain number on each property, then stopped. only one property do an individual get out of over 50 properties
there were also a couple of speculators that went very cheap on a number of properties, only to be out bid by the mortgage company
Another tactic, is wait to talk to the mortgage company after the bid about interest in buying the property from them.
Posted on 4/12/17 at 12:46 pm to GeauxColonels
Usually I see it stated as a "1% interest in the property" when it goes to tax sale. So who would foreclose, do you essentially assume the position of a partial lender on the property when you buy it at tax sale?
Posted on 4/12/17 at 12:48 pm to Bayouboogaloocrew
Anyone keeping up on the tax sales NOLA did a few years ago?
I don't recall all the controversies, but I remember it was a gamble on how they were going to handle the 3year wait period
I don't recall all the controversies, but I remember it was a gamble on how they were going to handle the 3year wait period
Posted on 4/12/17 at 12:49 pm to Sneaky__Sally
quote:
What happens after the redemption period is up?
quote:
You just own it?
No you still have to file and prove the current owner was notified in the correct manner required by the law. A real estate attorney can help with this.
quote:
What if multiple people have acquired the "rights" for the same property in different years?
Once you buy the tax lien you are "required" to pay the taxes for the next few years. If you do not they will just auction it off again and restart the process. If you do pay it keeps other investors from acquiring those same "rights" you already have.
Posted on 4/12/17 at 12:49 pm to Bayouboogaloocrew
IF it is being auctioned at tax sale you have to be a cash buyer as well i believe. Not certain but i would think any delinquent taxes would need to be paid too.
Posted on 4/12/17 at 12:49 pm to tigeraddict
quote:
i went to a sheriff auction once to see how the process went.
is a bit different than a tax sale
quote:
a rep from the mortgage ALWAYS bid until it got to a certain number on each property, then stopped
they will receive the funds for any sale so they are bidding until it reaches their underlying loan value
quote:
Another tactic, is wait to talk to the mortgage company after the bid about interest in buying the property from them.
ya they just don't want to get hosed on their loan, they usually have no interest in actually owning / managing a property
This post was edited on 4/12/17 at 12:53 pm
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