What is a County-Owned Lien and How Much Should I Bid?

A county-owned lien is a property tax lien that was previously offered at a tax lien auction but did not sell, and is now owned by the county. Here's what you need to know about county-owned liens and how much you should consider bidding.

1. Understanding County-Owned Liens: When a tax lien certificate fails to sell at a public auction, the lien becomes county-owned. The county may offer these liens for sale at a later date, often at a reduced price or with flexible payment terms to attract investors.
2. Potential Investment Opportunities: County-owned liens may be sold at a discount, providing an opportunity to acquire the lien at a lower cost. Additionally, the interest rate or penalties associated with these liens may still offer attractive returns for investors.
3. Assess the Property's Value and Condition: Before bidding on a county-owned lien, research the property's market value, location, and condition. Consider whether the property's value justifies the investment and whether there are any risks or liabilities associated with it.
4. Consider Existing Liens and Encumbrances: Determine if there are other existing liens or encumbrances on the property that could affect your investment. If there are other liens, such as a mortgage or IRS lien, these may have priority over the county-owned lien.
5. Calculate Your Maximum Bid: To determine how much you should bid, consider the property's assessed value, potential market value, expected return on investment, and any costs associated with the property (e.g., repairs, legal fees, or holding costs). Set a maximum bid amount that aligns with your investment goals and risk tolerance.
6. Understand Local Rules and Procedures: Different counties may have different rules and procedures for selling county-owned liens. Review the specific guidelines for the county where the lien is located to understand the bidding process, payment terms, and any associated fees.
7. Start with a Conservative Bid: If you are new to tax lien investing or unfamiliar with the area, consider starting with a conservative bid. This approach minimizes risk and allows you to gain experience in the market before making larger investments.