Purchasing for Pennies on the Dollar at a Tax Sale

If you've become frustrated with the lack of opportunities in the real estate market, you may want to consider what visiting a tax sale can do for your prospects. Instead of buying homes for just a bit below market value and trying to turn around and sell them to a public that isn't buying, you can purchase homes for pennies on the dollar. While these properties are seldom in selling condition, with a little bit of effort and money you can turn them into a home that will have terrific curb appeal. It takes work, but it can be well worth it, as you will see when you make your first sale.

Foreclosure

Foreclosures occur when a homeowner fails to meet his financial obligations. Although mortgage foreclosures, brought by the bank, are the most common type and the ones most people are familiar with, those don't lead to a tax sale. But the government can bring foreclosure as well if a homeowner fails to meet his financial responsibilities to them. The holder of the lien can bring about this foreclosure, leaving the homeowner with no choice but to vacate the property. The authority is then interested only in recovering the unpaid taxes. They will do so by selling the homes at a reduced cost. This gives the government (or private lien holder) a chance to get what's owed to them and it gives investors a chance to pick up a property for a song.

Searching for Properties

If you're interested in bidding at a tax sale, you'll first need to know how to find the properties. Thankfully, most cities and counties make it easy to come by this information. You may be able to find the information right on their website. If there is an auction scheduled to occur soon, you can gather whatever information they have on the properties (which may be scarce) and begin doing your own research. This includes visiting the physical property yourself, as it is usually a mistake to buy a house without knowing exactly what you're getting into.

The Auction

A tax sale doesn't work like buying a home in a traditional manner. Once you've placed a successful bid on a property, you will be expected to pay for it almost immediately. You need to secure whatever financing you need before the auction, or you may risk losing the home to the next eligible bidder. Once you've paid for the home, it may still take some time before you get a letter certifying the property as yours. After you have received this letter, however, the property will be yours to do what you wish.