Question About Liens
Hi!
I am a tax deed investor and had the following question, which I can’t seem to get a straight honest answer from anyone here in my area.
When purchasing tax deed's at county auction or after the auction from the lands available for taxes list, do I still need to worry at all about liens on the property?
Some people tell me that the county tax deed's override all the liens and wipe them off, and some people tell me that mortgages and government liens still stick to the property even after the tax deed sale?
Question :: 2, Is there anything else you need to watch for and be careful of when purchasing a tax deed property.?
Thanks for your help and support in advance!
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orangecell1----------
Every state has different laws related to collection of delinquent tax liens. You don't state where you are, so there is no way to tell you about the law in your state.
You need only to read the state law on this issue. Look for the statutes that deal with tax sales, delinquent tax liens, delinquent property taxes, etc. You will find that it tells if there are things that survive the sale.
Good Investing********Ron Starr****************
Any tips on TX and FL??
orangecell1-------------
Both FL and TX have high rates of return. TX is actually not a tax lien state, but it acts a lot like one as you get a quitclaim deed from the sheriff's office when you buy a property, then the owner has a period with a right of redemption. If the lien is not redeemed within the redemption period, your deed is good. You don't have to do any foreclosure or anything, as the original tax sale was a judicial foreclosure of the tax lien. I think the only thing that survives is the IRS lien, which would evaporate after 120 days if the IRS does not redeem. Perhaps there are some state liens that would survive, I don't know. That is why I suggest you read the laws.
FL is unique in having both a lien auction and then when it gets time to provide a deed, there is a public bid auction for the deed to the property. If you are going for the 18%/annum return, this is fine, either you get the return, paid by some other bidder or else you get the property. If you are after properties this is bad because you have to compete for the property with other bidders, which might make the price too high to make a good deal for you. Again, I don't know what survives the deed auction.
Good Investing*********Ron Starr************
In general all local and state liens survive in a foreclosure from tax sales. Hiowever, very often they are also paid off curing the payment of the back taxes during the tax sale, which typically lumps all of these outstanding liens together at the tax sale. But to be sure, make sure to check! Good luck! But Ron Star's recommendation as usual is good---to check with the local authorities, i.e the local county DA.. Good luck!
RC