Tax Auctions?

Question

I have heard that you can buy houses and property for pennies on the dollar at tax auctions. A 80,000 + house for $500.00 Is this possible? Where do you find these properties.

Answer 1

That sounds more like the promise made by a infomercial on television.  The property is auctioned, and goes to highest bidder. Any excess over the property taxes and possible IRS lien goes to outstanding debt on the property.

Answer 2

It is possible, however I have been to tax auctions, and I can tell you it is not very likely.

I am sure there was a time in which tax auctions provided lot of opportunities for great deals, and I hear that in some areas the opportunities are coming back. However, that auctions used to be saturated with too many high bidders. and unexperienced spectators that caused auction inflation.

The rules for bidding on properties is pretty simple - the minimum bid is normally the amount of back taxes owed on the property.

What you are bidding on is different from state to state. In some states you bid for the deed to the property, in other states you bid for a lien against the property in which the owner can redeem with interest to the buyer of the lien.

Check your counties tax office, and ask them how they handle properties which default on their property taxes. Get the rules of the auction. AND pick a small group of properties to bid on, and RESEARCH those properties. If you win the bidding, you basically own it (even if you paid too much).