Many new investors wonder whether their state does tax liens or tax deeds. The following states hold tax deed sales:
- Alaska
- Arkansas
- California
- Connecticut
- Delaware
- Florida
- Hawaii
- Idaho
- Kansas
- Maine
- Michigan
- Missouri
- Nevada
- New Hampshire
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Dakota
- Tennessee
- Texas
- Utah
- Virginia
- Washington
- Wisconsin
Within each state, the counties make their own rules and have their own schedules for when tax deed properties come up for sale.
Tax Deeds vs. Tax Liens
When someone doesn’t;t pay their property taxes–the local government municipality (usually a county) will foreclose on the property. Eventually, the county will be forced to sell the deed on the property in order to try to recoup the back taxes that they are owned.
In cases where the county is selling the actual deed to the property–you’ll be able to acquire these properties at auction.
Tax liens are different in that investors aren’t bidding on the deed for the property itself–they are bidding on the right to collect the late fees and interest if the owner ends up paying the back taxes that are owed.
That’s a big difference.
You’ll want to be clear on the rules that your county has in place–and whether or not you’re dealing with a tax deed or tax lien situation.
The big issue with Tax Deeds no one talks about
Despite a lot of hype around tax deed investing–there is a little dirty secret that very few mention.
The job isn’t done when you’ve purchased a property–it’s only just begun.
Even if you’ve acquired a property, it’s already vacant (some are not) and there aren’t any immediate disasters that you couldn’t previously spot–you’ve got a major head waiting for you.
You see, when you go to actually sell that property (and extract all that equity sitting in it) you won’t be able to go to any regular title company for title insurance.
You’ll have to do what’s known as a quiet title action to clear the property for title insurance.
Alternatively, you can use a special tax deed title clearing service to help you get title insurance. These are typically much cheaper than a quiet title action–although it can vary by situation.
There is a lot you can do to get educated on Tax deeds before jumping in.
The more you know, the more problems you can avoid ahead of time.
Good luck bidding!
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