Understanding the Relationship between Tax Liens and Foreclosure Sales
As the owner of a tax lien against a property, you are the holder of a lien that in nearly all situations will take precedence over any other debts. As a tax lien holder, if the lien is not redeemed within a given amount of time, then you have the option of foreclosing on the property. In many cases, this is the end goal anyway. You bought the tax lien with hopes of eventually taking control of the property. However, in some counties, just because you foreclosed on the property does not mean that you actually will end up owning the home.
Some city governments that sell tax liens actually send homes in foreclosure to a foreclosure auction rather than simply allowing the lien holder to foreclose. This is to help resolve more of the debt that the property is likely to be carrying. In this scenario, when you foreclose on the home you start the foreclosure process which ends in an auction. From the money made at auction, your lien and the associated fees, penalties and interest will be paid. Then other people with liens against the property will be satisfied as well.
If your main goal is to end up with property at the end of your tax lien strategy, make sure that you are not investing in a property or in a geographic area that is subject to this type of foreclosure auction process. Do you like or dislike properties with these types of resolution?
Thank you for reading! Your comments and questions are welcomed below.
Is there a website that shows which areas don’t allow you to foreclose to get the property?
This happens in all counties in the state of Florida. You do not get to foreclose on the property, instead you petition the court for the lien to go to a deed sale. When the property is sold in the deed sale you get paid. Of course you can also go to the deed sale and bid on the property and if no one else bids on the property you can bid one dollar over the upset price and get the property for one dollar.
If the property is homesteaded, however the bidding does not start at back taxes and the cost of the sale, it starts at one half the assessed value.
i dislike this type of resolution.because once the redeemtion period had passed i am expecting that property and if this is the way they are going to play with my money i’d rather not invest. if they start doing this i am going to say a whole lot of people investing in tax liens will think extra hard about this strategy the are trying to pull they might even discourage people from buying in tax liens
Where can we get a list of states that do these types of foreclosure proceses?