Things that Happen When You Purchase a Tax Lien

By dhinternational  /  November 14, 2012 / Comments Off on Things that Happen When You Purchase a Tax Lien

Things that Happen When You Purchase a Tax LienThere are cases in which you need to participate in a first-come and first-served basis in order to purchase a tax lien in a county tax sale. However, there are also instances wherein there is a lottery or round-robin purchasing style. In most cases though, you are going to purchase a lien of a property by bidding against other investors at tax lien sales. Here is a short but insightful explanation on what happens in a tax lien sale when you purchase a lien.

The very first thing that would happen is that you are going to pay in cash for your bids on a lien. There is going to be a huge amount of cash involved for great looking properties. This is alright since you are looking to make some nice interest rate from tax lien properties that would reap large profits later on. Then, you would be holding the lien against the property for the redemption period specified by the law of the state. Do not be surprised though, that many of the delinquent homeowners would most likely pay off the back taxes as well as the interest and other fees on your lien. When this happens, the county is going to return your bid money together with the interest. The homeowner gets back his deed which ends the whole transaction.

There are cases wherein the homeowner does not have enough money to pay off his debt. Situations like this make him decide to just let go off his property. You can now get income in another form from the tax lien certificate in your possession. You would then apply for the property’s deed. This enables you to get the right to ownership of the property which is also a great deal in the end.

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