Should You Buy A Tax Deed Property?
Often times people don't realize that they need to pay their taxes or don't
have the money when the tax bill comes around, so they put it off. However, if the taxes do not get paid the property goes into a tax deed sale to collect those taxes that are owed. Your local government will sell your property for next to nothing to property investors, who in turn, resell it for its current market value at a huge profit. Keep in mind that each state has different rules for tax property auctions.Everyone in the country is required to pay some type of local property taxes and when they do not get paid, the city or local government can take your property away and resell it. Whoever wins the auction gets the property's deed. In some states, however, the homeowner has a redemption period during which they are allowed to get the property back if they pay off all the taxes and fees plus interest to the investor who purchased the deed.
When an auction is about to take place, the government will advertise it in the local papers and list all the tax deed properties that are to be auctioned. This allows anyone who is bidding on the property time to research the property and decide if it is worth the money that it will take to actually win. The total auction price of the property includes any back taxes, interest, fees, and court costs that have accrued. This is usually substantially lower than what the property is actually worth.
Once the allotted timeframe has passed, the auction winner becomes the owner of the tax deed and will have the first opportunity to purchase the property once it goes into foreclosure. This can be a long process and often the person who owns the deed does not buy the property because often the original owner is able to pay back all the taxes and fees.
If you are interested in purchasing a tax deed there are several steps that you should consider. First, you need to decide what state has the rules that are the most advantageous to you. Then, you need to find the best way to search for available tax deeds. This can be either online or through newspaper listings. Next, you should hire an attorney to represent you in case you are unable to be physically present for the auction. Finally, make sure you know who the owner is and how to contact them so that the if they do happen to pay off their debts both you and the local government will be compensated.
If you are a property investor, you always need to keep some cash on hand so that you can pay any auction fees and pay your winning auction price for the property.
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