What is a Tax Certificate on land ?

Question

Can some one tell me the pros and cons. i see this land on ebay for like $100 but for a Tax Certificate

Answer 1

A Tax Certificate on Ebay?

Hm mm...go figure...it is a scam more than likely.

A tax certificate is purchased from the property tax authority (usually the county or parrish). It's purpose is to collect unpaid taxes on a property where the owner has failed to pay the tax. They are generally sold at an open auction. The bidding isn't for the amount of money it is for the lowest interest rate. If you win a bid you have to pay the property tax on that person's property and you get a lien against the property (meaning before it can be sold you will be paid for the tax and the interest).

There is a time limit (depending on the state) that you can force a sell of the property to collect your money...again this is usually an open auction. It is almost unheard of the tax lien to be greater than the bid at the auction (if there is a mortgage...the mortgage company will make sure of that).

I will admit that I am not sure if a tax certificate is assignable (meaning that you can buy one from a person that is holding one). But, I am very sure that I would not buy one that someone wants to sell (there has to be a reason).

Hope this helps.