Home » Build Up Muscle » Tax Lien Investing: What Happens at a Tax Sale?

What happens in the tax sale depends on what state you attend a sale in, and on regardless of whether it can be a tax lien sale or perhaps a tax deed sale. Tax lien sales could be extremely diverse from state to state or perhaps from county to county within a state. Tax deed sales are just about the exact same about the nation.

At most tax deed sales the properties are read off by the auctioneer in the order that they are listed and also the value from the property is bid up. The exception to this is in counties which have on the internet deed sales, like some counties in California and Florida. In order to bid at an internet auction, it’s important to register on the internet and put up a deposit. The properties are often listed in batches along with a time from is provided for every batch. You place bids in on the properties that you want to bid on, but you do not know who else is bidding and what the other bids are. You could possibly not even know when you are the thriving bidder on a property until after the sale.

Tax lien sales can differ greatly from state to state. In some states the interest rate is bid down. This occurs in Florida, Arizona, (two with the most popular tax lien states) Illinois, and in Nassau County, NY. In other states the rate of interest is kept constant along with the value of the lien is bid up. The quantity bid up in the amount due is known as “over-bid” or “premium,” and every state handles it a bit differently. In some states you obtain interest around the premium paid for tax liens (Alabama and Indiana are two state that offer you interest on your premium), and in other states you do not (West Virginia is certainly one of these states). Some states do not pay interest on the premium quantity and do not return the premium towards the investor must the lien redeem (Colorado and Vermont are two of those states). New Jersey may be the only state where the rate of interest might be bid down to zero and after that premium is bid. You don’t acquire any interest on the premium paid, but you do obtin your premium back when the lien is antique auctions Connecticut

In some states, something entirely distinctive than the interest rate or the premium is bid. In these states, what is bid down may be the % ownership interest inside the home should really the lien be foreclosed. The tax lien certificate is awarded to the bidder willing to accept the lowest % ownership interest within the house. As you’ll be able to envision, this makes for some sticky scenarios need to you need to foreclose on a lien and is just not the excellent circumstance for the investor. Tax sales are performed in this way in Rhode Island, Nebraska, Louisiana, and Iowa.

Some states will use a random selection or round robin estate sales Connecticut to award tax lien certificates at the tax sale. With the random choice procedure, the tax collector or auctioneer randomly selects bidders, normally by bidder quantity for every parcel as it is read out at the sale. Using the round robin process, the tax collector will go about the area, offering the following parcel on the list to the subsequent bidder in line. The downfall to each of these procedures is the fact that you can not pick which properties you should bid on and only do your due diligence on these properties. Here you don’t know which properties will likely be provided to you and also you can only accept or decline the ones which might be presented to you. The random selection method is employed in Wyoming and in Oklahoma. The round robin procedure is applied in some counties in Colorado for liens beneath a certain amount (the quantity differs by county).

One tax lien state does something totally different than any other, and that may be the Commonwealth of Kentucky. In Kentucky, nothing at all is bid, or randomly chosen. There’s no auction. They accept bids for the amount due plus expenses by mail, e-mail, fax, and in particular person, along with the initially bid to become received is awarded the tax lien. Even though you’ll be able to mail or fax your bid in, you must be present in the “sale” to become awarded the tax lien certificate.

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