What Is A Tax Sale
What is a tax sale? There has been a well kept secret in real estate investing that has been hidden from the eyes of most novice real estate investors for many years.
When the real estate market crashed the tax sale market exploded with possibility. What was once a market limited in stock, suddenly became a virtually endless supply of properties available for pennies on the dollar.
Understanding what a tax sale really is will be important to understand. There are two types of tax sales. I will go into detail for each one separately in another post. Here I will summarize them both types to help you understand the options that are available.
Local governments rely on property taxes to finance the government. When property taxes are not paid by property owners, the municipalities go with out the needed funds and must collect them in order to continue to provide needed services.
Tax deeds and tax liens are the two types of tax sales that are offered.
A tax deed is sold at auction and the owner takes the deed to the property. In most areas all liens and encumbrances are removed excluding federal judgments.
A tax lien or tax certificate is the lien placed on the property by the tax commission and placed ahead of other liens including the mortgage. After a pre-determined time, the owner of a tax lien can foreclose on the property if the lien is not paid.
These types of auctions are held across the country in most states. They are held at different times through out the year often with hundreds of properties up for auction.
If you would like to begin learning all that you need to know to make money with tax sales then visit our Real Estate training page and download your free report.
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April 18th, 2010 at 2:18 pm
I live in ILLINOIS and bought property at a tax sale & received a tax sale certificate. I want to tear down the structure on the land and clear it off, since it connects to my property. I have heard that you have to wait 3 years to get a deed before you can do anything to the property. I wondered if that’s true and if you have to get a deed to remove the dilapidated structure on it.
April 19th, 2010 at 5:09 am
If you purchased a tax lien certificate then you do not have any rights to the property so you cannot tear down the structure. The redemption period is two years in Illinois, but you can extend it to three if you wanted. After the redemption period is over you can start the foreclosure proceedings to obtain the deed to the property. Once you have the deed you can then tear the structure down. Contact the county tax collector to find out what is required to foreclose on the property.
I hope that answers your question.