Tax lien
While no one likes paying taxes, however for some, the word "tax" is synonymous with "opportunity ." At times taxes are profitable. This is a new human race which owns tax credits or participates in tax lien auctions . As a matter of fact, a whole new industry has come up from people that keep on hunting the local auctions for real estate sales, caused by delinquent taxes. These forced sales, or tax lien sales, are becoming more and more mainstream and popular with the general public .
Buying Tax Lien
In most jurisdictions, when a property owner is late on paying real property taxes, the county or municipality will issue a tax lien on that person\\'s property . Certain states allow the tax lien to become a first lien on the property, which is then turned around and sold at auction as a tax lien certificate . After placing a successful bid, buyers of a government-issued tax lien certificate will then get one of two things:
1) A state-mandated yield from the lien, which the delinquent taxpayer must pay in order to release the lien .
2) Title to the property (after a certain amount of time, set by the jurisdiction) if the delinquent taxpayer fails to pay up .
Thus individuals have been buying the tax liens more and more because of these two benefits . A fixed percentage rate imposed by a government agency or the title to property at a substantial discount, are incredible benefits rarely seen with other real estate transactions . The news about the tax lien auctions are announced and circulated by the government or the agency on behalf of the government, conducting the auction widely in the local bulletin boards or in the news . The tax lien offer may look quite lucrative but to lay hands on it, the only restriction is the bided amount has to be paid in hard cash, either in full or a major percentage while the remaining in a specified time set by the auctioning agency.
A Word of Caution
For an individual, when purchasing a tax-distressed property, should make sure to do due carefulness and homework prior to logging in and placing a bid. One should also review the regional foreclosure lists regularly to find out the types of property currently available . One may also want to verify the reputation of the authority conducting the auction on behalf of the County. The reward of tax lien seems promising. No one would like to dishonor the opportunity to pay a fraction of the cost for a new home, either to collect a fixed penalty from the homeowner or (in case of default) the property itself . However, what many tax lien buyers find out is that, if they do not conduct a proper title and bankruptcy research, their tax liens can become worthless . For instance, creditors and the IRS can take priority over tax lien holders in cases where the original owner of the property declares bankruptcy . Thus one has to be smart enough to duck the loopholes to reap the most out of buying a tax lien.
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