brianpul
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Re:question on tax liens - 2008/07/20 01:07
So what happens if you pay the Tax lien and then an auction happens, and you do not want too buy the property or you just simply do not win?
What happens to that money you paid into the tax lien?
just for sake of conversation say i had a property i and paid 2,000 for the tax lien. The auction comes up and I don't win? Did I just lose 2,000 dollars?
Also, I know there is a time limit on that lien. So what happens if the original owner makes good on that lien after I have bought it?
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What happens is that if paid $2000 then it will never get to auction because the $2000 paid the taxes. Its up to you to foreclose on the property if and when the property owner's right of redemption period expires (varies from jurisdiction to jurisdiction)
To avoid foreclosure the property owner needs to pay the back taxes and late fees at the rate spelled out on the lien. The original owner must pay it before the right of redemption expires.
If you forclose you can convert the Lien into a tax deed and legally take the property, free and clear.
In short you either get the back axes back plus interest or the right to foreclose yourself free and clear
A warning and tip
I found that you can sometimes avoid overpaying for tax liens by buying them over the counter after auction. You may not get the difference back between the difference of what you paid and the back taxes.
The property owner is only liable for the back taxes and late fees. the reason why the prices jump is a lot of people are speculating on getting title to the property to resell for a significant profit.
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