What is a tax deed?  I touched on tax deeds in my post yesterday about tax deed auctions and today I wanted to go over tax deeds in more detail to help you understand what exactly a tax deed is, how it is formed, and what you do with it.

Property taxes are used by municipalities, schools, and other government sponsored organizations to pay staff and bills.  When the property taxes are not paid, the entities still need to make their budget.

They send notices in an effort to collect the owed taxes, but sometimes property owners either cannot afford the taxes, or do not want to pay taxes, or have abandoned the property.

If the taxes are not paid, the municipality seeks out investors to help in the situation.  They auction off the tax deed with the minimum bid starting at the amount of taxes and fees owed.

This is a big deal!  It is possible to get a home for a few hundred or thousand dollars and then turn around and sell it for a profit.

Since they are selling the deed, you own the property.  The tax deed removes other liens on the property in most cases.  This is not true in all areas so you will want to check with the local officials for local rules.

There are redeemable deeds that are sold as well in Georgia  and Texas.  Redeemable tax deeds are like regular tax deeds, except the property owner can redeem the property from they buyer by paying the taxes owed plus fees and interest.  They only have a specific period of time to do this and when the time expires the property is yours.

There is a lot to know when buying tax properties and selling them.  I learned about a company that has done the work for you and teaches you how to buy and sell the properties with strategies that work in today’s economy.  I recommend you visit my real estate training page and click the link to get your free report.

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