subject: What To Do Before Buying At Tax Sales [print this page] If you're planning to buy properties at tax sales, there are some steps to take before lining up to place your bid. Houses end up on the courtroom steps or are offered on online auction websites because their owners failed to pay property taxes. Property taxes are the obligatory responsibility of every man and woman who owns a piece of property. If a person has a mortgage, the monthly payment may include taxes and insurance. If so, the payment is referred to as PITI, which stands for payment including taxes and insurance. This can be a simple way to do it but some homeowners opt to pay these expenses separately.
Property taxes are collected by the county treasurer. These funds are earmarked to pay for community services such as the librarian's salary and the library itself. The money also pays for the teams of firefighters, police officers, and sheriffs who protect the area. Public parks and roadways are maintained by crews whose salaries are paid with county funds. Children and community college students are educated by teachers whose salaries are covered by these funds, as well. Because so many homeowners have gone belly up and have become unable to pay, the county treasurer's bank account has grown slimmer. As a result, some of the libraries have reduced their hours or closed, schools have had to cut jobs or increase the size of classes, public safety and parks have taken a hit, too.
If a person wants to purchase property at tax sales, he or she will need to be prepared. Some steps that should be taken in advance include performing an inspection of the property's exterior and interior. It's wise to bring a contractor from the building trades to offer an opinion of what needs to be repaired and for how much. The costs of repairs and renovation must be figured into the equation. It's also important to call an insurance company to make sure they'll give you a homeowner's policy. If the house is in a rural area too far from a fire station, the policy may be declined. If the home is in terrible condition, while you may have a vision for it, the insurance underwriters may think differently. They may take a look and decide they don't want to be responsible for the risk factor. Another step that must be taken before the auction is to secure the funds to pay for it on the spot. When you purchase a house in this manner, it's cash and carry. They won't wait for you to find a mortgage provider. If you can't pay fully when you when you bid, they will give it to the next highest bidder.
Purchasing a home or investment property at tax sales can be a wise business move if you're prepared upfront. It's important to perform an inspection to look at plumbing, wiring, foundation and roof. It's also important to contact your insurance agent to make sure they'll cover it with a homeowners' policy. Finally, it's crucial to make sure you have cash in hand to pay the auctioneer. Don't forget to pay your own taxes so the place doesn't ever end up back on the auction block.
