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FAQs: Tax Lien Sales

When a property owner doesn’t – or can’t – pay the taxes owed on their land, they incur a tax lien. A tax lien is a legal claim made against a property for the amount of unpaid taxes, and it can prevent the sale or refinancing of the land. For those interested in real estate investment, it’s worth learning more! The state or county can offload the debt associated with a tax lien certificate to savvy investors, who can then profit from the interest charged on the outstanding amount. This transaction takes place in a tax lien sale.

Are you interested in profiting from tax liens? Are you feeling nervous or intimidated by an upcoming tax lien sale? Read on to learn more, and gain the knowledge and experience you need with a workshop by GA Tax Liens.

WHO Can Participate in Tax Lien Sales?

Tax lien auctions are generally open to all, although there are a few requirements. Bidders must over the age of 18 and legal U.S. residents. To make sure you are eligible to participate in a tax lien sales, many jurisdictions require you to register beforehand with information such as your name, address, and social security number.

There are occasionally tax lien sales limited to certain bidders or collection agencies, but today we are focusing on those sales that are open to any interested investor.

WHAT Is Sold at Tax Lien Sales?

When you participate in a tax lien auction, you are buying ownership of a tax lien certificate, not a property. That means you pay the amount owed to the state or county, and then subsequent payments toward the delinquent taxes and associated interest go to you.

The properties associated with the tax liens for sale will be published before the auction, often in local newspapers. You can also get a list from the treasurer’s office or find a list online within a few days of the auction. That list of properties will include street addresses and other information so you can learn more about your potential investment. In some cases, properties that are under the same ownership may be bundled and sold together.

WHEN Are Tax Lien Sales Held?

State and county tax lien auctions are often held on a schedule. This can mean a sale is held just once a year or every few months. These auctions often begin in the morning and will continue until a certain time in the afternoon or until all tax liens have been sold. You can contact your local treasurer’s office to learn the precise details – and rules – for any tax lien auctions in your area.

WHERE Do Tax Lien Sales Take Place?

Tax lien auctions typically take place in a courtroom or at a city hall. In a few cases, you may also be able to participate in an auction online.

HOW Do Tax Lien Sales Work?

First things first, you should keep in mind that each state and county has its own rules and procedures when it comes to tax lien auctions. We have endeavored to give you an overview of the general process here, but we highly recommend that you research the specifics of any tax lien sales in your area before participating.

As with any auction, the highest bidder wins. At a tax lien auction, this can mean the bidder willing to accept the lowest interest rate on the tax lien certificate in question. Once you have solidified your position as the highest bidder, you will be expected to pay the amount of the tax lien certificate. The county or state often has rules on what kinds of funds it will accept, whether it is personal checks only or everything but.

In some cases, you will be expected to pay the full amount you bid the day of the auction, which makes it essential to have the necessary funds – in the appropriate format – on hand. In other cases, the state or county will give you a few hours or days to follow through. If payment isn’t completed, the sale is cancelled, and the property will be included in a future auction. Failure to complete a sale may come with penalties. Possible repercussions may range from a required penalty fee based on a percentage of the sale to a ban from bidding on future tax lien auctions.

Do not bid on a tax lien you cannot afford! You can always start small as a new investor and work your way up as you gather more profits.

How Can I Learn More?

If you think tax liens are the right real estate investment for you, then come to the experts: GA Tax Liens. We offer workshops for investors at every level, from bootcamps for beginners to continuing education classes for experienced real estate brokers. Find the right option for you, and register today! We look forward to helping you take the next step.