Purchasing Real Estate That Has Delinquent Taxes

January 22, 2018 Facebook Twitter LinkedIn Google+ Buying Real Estate,Real Estate

There are typically two avenues for purchasing real estate that have delinquent taxes. One is through a tax sale, and the other is through a tax certificate sale. A tax lien certificate, or tax certificate, along with tax sales are typically held right on the property by an officer of the court. During the sale, the property will be auctioned off to someone in the group that places the highest bid. Making a purchase of real estate that have delinquent taxes can offer the new owner high lucrative returns if done properly.


It is important to seek out all the properties that are available that are just about to be sold because of delinquent taxes. A long list usually appears at the County Clerk’s office. The long list of tax sales lists all the properties that will be sold outright, where a transfer deed goes directly to the highest bidder.

Alternatively, a tax certificate sale allows the taxes to be sold, and not the property. The bidder offers a specific amount for the delinquent taxes which is usually equal to what is owed. There is a specific redemption time, where interest is accrued on the amount paid.

During this time frame, the current homeowner has the ability to pay off the delinquent taxes, plus interest, to the individual that was the highest bidder. The bidder gets to assume a high level of interest plus their original money. However, should the homeowner not pay off the delinquent taxes before the end of the redemption period, the highest bidder that owns the tax certificate has the option of starting foreclosure proceedings to take over the property.

County Policies

Every county has their own unique policies concerning tax sales and tax certificate sales. Usually, counties will have a tax sale at a specified location one time every year. Obtain all the information necessary about all the rules concerning bidding at the auction. This can usually be obtained by getting answers at the County Clerk’s office, where you can find out information including the square footage and the estimated value.

Visit the Property

Never place a bid on any property without visiting it first. You want to know exactly what type of property it is and the condition it is in, for the money you are spending. In all likelihood someone is still occupying the residence, so be forewarned. It is likely a better idea to simply look at the property from the outside to get an idea of what value the home has and its condition.

Calculate the overall price that you feel is fair for bidding on a specific piece of property. Typically, most counties expect that you will be putting down 25% or more the moment you win the bid. Any portion that remains will need to be paid in cash, or you will need to have secured financing already in place that can be transferred within 3 to 5 days. If you realize you will need financing ahead of time, you are likely to do well to be pre-approved for a set limit before the auction begins.