Tax deeds are some of the best deals in real estate

Are you looking to acquire a property for pennies on the dollar? You probably won’t get your dream home, but you can definitely find great deals that can be turned around quickly by attending tax deed sales.

A tax deed sale is simply when the county forecloses the property owner for non-payment of property taxes. The process for managing sales of tax deeds varies widely by state and even by county. In Ohio, for example, tax deed sales are done like Sheriff Sales, which is the exact same department that handles foreclosures. In Arkansas, there is a state office called the State Land Commissioner that handles all sales of tax deeds. In other states, sales of tax deeds are done at the county level and the sale is handled by the treasurer, circuit clerk, or auditor. As you can imagine, it is very important to understand local regulations.

The tax deed bidding process is determined by local regulations – some jurisdictions require that the minimum bid at auction be the appraised value or a fraction of the appraised value of the property. Other jurisdictions use the taxes due as the minimum offer.

This is where it really gets interesting. If the property is not sold in the initial sale, some jurisdictions allow the state or county to sell the property without a minimum offer regardless of what is owed. For example, in Arkansas, I bought a property from the State Land Commissioner for as little as $ 25. Read it again. This is not a misprint. Not $ 2500, not $ 250, but $ 25! I sold the property a month later for several hundred dollars. Does that kind of deal happen every day? Of course not! But it happens.

So how do you find these types of offers? If you do not know the regulation in your state, call the person in charge of the money in your county, whether called Treasurer or Tax Collector, and ask what the procedure is for delinquent taxes. They should be able to tell you when the next tax sale is. Then call the appropriate department and find out what the procedure is for properties that don’t sell at the opening auction. Are they sold at another auction? Are they listed somewhere where I can buy directly? Be persistent and you will soon find the pot of gold.

In short, tax deeds can be very lucrative if you know where to look and what to ask. So as Nike says, “Do it!”