If you want to really know about this topic, you could read John Beck's "free and clear" program which is offered on the johnbeck.tv website. It is only about $50 total, and has information for every state of the union, plus territories and all Canadian provinces.
More important however, is your investing strategy. Do
you want to own the property, or make money on the
high interest paid? Most of the time, you won't end
up with the property. Many times, you wouldn't want to
own the property. Researching the property details is
very important.
Free and clear" means that there are no encumbrances or nothing owed. While this is true for what I call "private liens" like mortgages, it may not be true for what I call "governmental" liens, like water district liens, IRS liens, school district levies and other municipal liens.
Some counties include local "governmental" liens and some do not (ask your local county tax collector this question or better yet read your state law regarding this issue). As stated by Dave the mortgage holder typically pays the tax lien to protect their interest, though they have been known to drop the ball in rare occasions.
Foreclosures are usually either judicial or administrative. Either you go to court to obtain title or some counties will
do it for you for a fee.
The time period that most states allow a homeowner to default on their property taxes before they sell a lien does vary from State to State.
You ask "Let's say a person owes the county $5000 in property taxes. After doing my research, I decide that I want to go to the auction and bid on this lien. Are there additional charges going to be placed on top of this $5000? In other words, will I end up paying $6000 for a $5000 lien?"
The answer depends on the type of auction being held. It could be one in which you bid up the outstanding bill and the highest bidder wins. Or you could bid down the interest rate that is paid to the investor when and if the owner redeems. Or I have heard of a system in which you buy based on the county offering each lien, going from bidder to bidder asking if they want to purchase the lien or whether they want pass on the particular lien.
If you want to really know about this topic, you could read John Beck's "free and clear" program which is offered on the johnbeck.tv website. It is only about $50 total, and has information for every state of the union, plus territories and all Canadian provinces.
More important however, is your investing strategy. Do
you want to own the property, or make money on the
high interest paid? Most of the time, you won't end
up with the property. Many times, you wouldn't want to
own the property. Researching the property details is
very important.
GOTO:
www.taxsales.com
www.taxliens.com
www.taxdeeds.com
www.investorsnet.com
www.inft.net
Free and clear" means that there are no encumbrances or nothing owed. While this is true for what I call "private liens" like mortgages, it may not be true for what I call "governmental" liens, like water district liens, IRS liens, school district levies and other municipal liens.
Some counties include local "governmental" liens and some do not (ask your local county tax collector this question or better yet read your state law regarding this issue). As stated by Dave the mortgage holder typically pays the tax lien to protect their interest, though they have been known to drop the ball in rare occasions.
Foreclosures are usually either judicial or administrative. Either you go to court to obtain title or some counties will
do it for you for a fee.
The time period that most states allow a homeowner to default on their property taxes before they sell a lien does vary from State to State.
You ask "Let's say a person owes the county $5000 in property taxes. After doing my research, I decide that I want to go to the auction and bid on this lien. Are there additional charges going to be placed on top of this $5000? In other words, will I end up paying $6000 for a $5000 lien?"
The answer depends on the type of auction being held. It could be one in which you bid up the outstanding bill and the highest bidder wins. Or you could bid down the interest rate that is paid to the investor when and if the owner redeems. Or I have heard of a system in which you buy based on the county offering each lien, going from bidder to bidder asking if they want to purchase the lien or whether they want pass on the particular lien.
Derrick Ali
[addsig]
You can buy left over property from the state of Alabama at this link:
www .ador.state.al.us/advalorem/sections/land.htm