How Does California Tax Deed Work?
Hi,
Can someone please shed some light to this? How do I go about buying the tax deed? how much do I make for the interest rate? If the county sell the property due to back taxes, who can buy the property? Do I have to own the property tax deed in order to bid on the property?
thanks for your help.
All sales require full payment, which includes the transfer tax and recording fee At the tax collector's discretion, purchases over $5,000 may be paid for on a credit payment plan, but they still require ten percent of the bid or $5,000, whichever is greater, deposited at the time of the www.sale.The balance is payable in lawful money of the United States or negotiable paper, as specified by the taxcollector, within a period specified by the tax collector, not to exceed 90 days from the date of the auction, as a condition precedent to the transfer of title to the purchaser. If the balance due is not paid within the period specified, THE DEPOSIT IS FORFEITED , along with all rights with respect to the property (§3693.1).
The right of the former owner to redeem any parcel is forfeited on the last business day prior to the sale in most areas, but not all.
You are urged to examine the title, location and desirability of the properties available to their own satisfaction prior to the sale. ALL PROPERTIES ARE SOLD AS IS
PURCHASERS ARE ADVISED THAT SOME BONDS OR OTHER ASSESSMENTS WHICH ARE LEVIED BY AGENCIES OR OFFICES OTHER THAN THE TREASURER-TAX COLLECTOR MAY STILL BE OUTSTANDING AFTER THE TAX SALE; IN ADDITION, THE I.R.S. HAS THE OPTION OF REDEEMING, UP UNTIL 120 DAYS AFTER THE SALE, ANY PROPERTY ON WHICH THERE IS AN I.R.S. LIEN RECORDED
The successful bidder may take possession of the property after the tax deed to purchaser has been recorded. Most title companies will not insure title on properties sold at public auction for at least one (1) year after the tax deed has been recorded. Legal action to challenge a tax sale must be commenced within one (1) year of the tax recording date
A California documentary transfer tax will be added to, and collected with, the full purchase price. This tax is calculated at the rate of $.55 for each $500.00 or fractional part thereof, if the purchase price exceeds $100.00
I hope this helps
Thanks to Ron and John for the advice. Looks like I am going to pass with CA tax deeds.
Ron - If I want to buy Texas tax lien, can I buy it online or I have to be physically at the courthouse to buy the tax lien?
thanks again.
Texas is one of my largest REI markets and yes you can purchase tax deeds online in many counties
r c y--(CA)---------------------
I don't understand this question. Or at least I don't understand the reply of John Michael(MO).
TX is not a tax lien state. It is a tax deed state. You get a quit claim deed from the county sheriff after you have bid at a public outcry auction.
There is a right of redemption on the former owner's part after the deed is received of either 6 months or 2 years, depending upon the category of property. After the redemption period expires there is no need to do anything more. The deed has become permanent.
Any property not bought by an investor at the sale would be "struck off" to the county or other taxing entity that has initiated the tax foreclosure auction. So, there would not be anything sitting around to buy, such as a tax lien.
Hmmm. Well, after the sale where a property went to the taxing entity's hands you could attempt to buy from the taxing enitity. Maybe that is what Michael Thomas is talking about.
However, this is a public bid auction, I believe, after which you would get a deed if your are the successful buyer. Since you are going to be the owner, it seems to me only sensible to see and study the properties before offering to buy them. So, the concept of buying from home, sight unseen, does not sound very sound to me.
If you are very familiar with the properties in the area, from previous experience, you might take the risk to buy from home. But otherwise, does not sound good to me.
Good Investing***************Ron Starr****************
Sorry for the improper use of verbiage of Texas tax sales!
In an effort to clear up my verbiage usage I will explain a little further based upon my experience and my limited 20 years of experience in real estate investing.
If back delinquent real property taxes are not paid in TEXAS, the property being taxed, as opposed to a certificate, is sold with the opening bid, generally being, just back delinquent local real property taxes, penalties, interest and foreclosure costs.
The parcel is sold to the bidder willing to pay the highest price. The bidder receives a tax deed (typically called either a sheriff's or constable's deed depending on who conducts the tax sale.)
The owner retains a right of redemption as with tax lien certificates.
Texas tax deeds recorded before December 31, 1993; this redemption (or buyback) period was two years. But, as result of an amendment to the Texas Constitution approved by Texas voters on the November 2, 1993 election day, there is now a two tiered redemption period.
Redemption Period for 'Homesteaded' and 'Agricultural Use' Properties New Article VIII, Section 13, Subsection (c) of the Texas Constitution states in part: 'The former owner of a residence homestead sold for unpaid taxes and the former owner of land designated for agricultural use sold for unpaid taxes shall, within two years from the date of the filing for record of the Purchaser's Deed, have the right to redeem the property...' In other words, if the property is 'homesteaded' property or 'agricultural use' property, then the redemption period remains two years.
The Texas Constitution states that the 'former owner of real property not covered by Subsection (c) of this section sold for unpaid taxes shall, within six months from the date of filing for record of the Purchaser's Deed, have the right to redeem the property...'
For all properties other than 'homesteaded' property or 'agricultural use 'property, the redemption period is now just six months.
Almost all properties sold at Texas tax sales are non-homestead/agricultural use properties. Consequently the redemption period will almost always be six months.
Texas does not have tax lien certificate sales. However, Texas is an excellent state for tax deed sale.
As with tax deed sales or tax certificate sales, on must exercise due proper investment strategies by checking the subject properties title as you may inherit other financial obligations that could produce a bad investment.
Do not fall pray to the get rich gimmicks that claim you can buy homes for 100's of dollars!
Real Estate Investing is not get rich overnight! Real Estate Investing builds wealth over the long term.
If you do win in a california tax deed auction, does that wipe out any trust deeds that are in place on the property? How would you approach the people living there to ask for a quiet claim deed? Has anyone rented back to the previous owners?