Posted by Bill H on March 24, 2005 at 16:15:59:
Buy lots of tax liens/certificates/deeds every year. May Be I can assist you.
First some words on how tax sales work.
Every tax sale, except CA and a couple of other states, have some redemption period attached to them. You do not get immediate title to the property. You must wait out the redemption period per your state statues…then in some cases you must foreclose and in others it is yours…if unredemmed…98-99% will be redeemed.
So my questions are…
-If taxes were made current, would the county forget the auction?
YES, the county is not in the real estate business.
-Does the homebuyer get any proceeds from the auction? Or does the county take the house, pay off the taxes and give the bank the remaining funds?
Depends on your states statutes, normally the answer would be no…cannot say for sure as do not know where you are.
-Is the bank shafted?
If they are properly notified and fail to clear it up or redeem it during the redemption period they are out of luck. In virtaully 100 percent of the cases they will clear it up before it actually matures to you.
What does the bank get? (See above)
My thinking is that I could approach the home owner, offer to buy his house from him. He has owned it for about 15 years, so I assume (could be off basis) that he has good equity. If this turns out to be true, I would try to buy it from him, give him a few thousand for his trouble, and settle the tax issue.
This is common referred to as taking subject-2. YOu would be buying it subject to all liens and encumberances of record…your purchase would not clear title of anything…you would be in violation of the due-on-sale clause…all it does is just pass it on to you. Mere paying of the taxes does not clear title.
Any advice?
YES, Investigate BEFORE you Invest…buying a tax lien does not give you any ownership rights in most cases. All you are doing is loaning the money to the taxing authority to pay the taxes for the interest and penalties involved.
You can definitely get BURNED in this business…it is not like the late night TV Guru’s make it out to be.
Search the archives of this and every board that you visit under “Tax Sale” “Tax Lines” “Tax Certificates” “Tax Deeds” and you wil find lots of info.
Good LUck,
Bill H