Tax Deed Property: Attractive Investment Preposition
What is Tax Deed Sale?
Tax deed refers to the authority of the government that it can sell a given property to recover the delinquent taxes. The government also has the authority to transfer the given real estate property to the buyer. These property sales are known as tax deed sales. Such sales are carried out through formal auctions. The minimum bid in these auctions refers to the amount of taxes and fees the original property owner owes.
Tax Deed Sale: A Better Option?
If you are looking to invest in real estate but do not want to get involved with mortgage loan for a long time period, tax deed sales are a very good option for you. A tax deed sale is a type of foreclosure where the owner of the property is unable to pay the taxes on his property. Such a property is first sold as tax lien. If the owner does not pay tax lien during reporting time, the property then goes to auction at the county level. Tax collectors in 29 states of USA utilize tax deed sales to recover the dues on the property form the owners.
Tax collectors send notices to the owner to pay the dies. When some owners pay no heed to such notices, tax collectors only wait until a time stipulated by the state rules before putting such a property on sale through an auction. In different states, this waiting period varies from a few months to a few years. A live auction is held every year to sell of the properties against which there is tax lien. The sale of such properties is advertised a few weeks before the auction where the date, time, and location of the auction is notified. This notice contains the descriptions of all the properties to be auctioned on the due date.
Property Bidding
If you are interested in bidding on a property listed in the notice, you need to sign up for the bid card and be there physically on the day of the auction. Place your bid on the property you have decided when it comes up for auction. The bidding continues until the final bid is offered and accepted. If your bid is final bid, you have to give your name and address for public record. You have to make full and final payment for the property at 3 PM on the date of the auction. The original deed of the property is mailed at your address on the same day.
If the owner of the property pays all his dues before the date of auction, you get back the investment you made as a bidder along with the interest for the period which is applicable in your state. This means you are not at a loss and earn a high rate of interest on your investment for the period for which your money becomes locked. In most states, this interest rate is 10-12%.
