What Is a Tax Sale Property and How Do Tax Sales Work?
By Craig Donofrio Original Article posted on Realtor.com
Normally when you buy a house, you don’t want a home with any outstanding liens against it (that’s also why you pay for a title company). But what happens to those houses with outstanding taxes?
You can buy those, too. Or you can just buy the lien and profit from that. Here’s how tax sale properties work.
What is a tax sale property?
There are two types of tax sale homes: tax lien sale homes and tax deed sale homes. Both represent sales of homes with unpaid property taxes.
A tax lien sale is when the liens are auctioned off to the highest bidder. The highest bidder now has the right to collect the liens, plus interest, from the homeowner. If the homeowner can’t pay the liens, the new lien owner can foreclose on the property.
In a tax deed sale, a property with unpaid taxes is sold in its entirety, at auction.