subject: Delinquent Tax Sales - Getting Real Estate Cheaply [print this page] Delinquent tax sales can take a couple of different forms, either of which can provide the average investor with a chance to make some real money. In one form, the certificates themselves will be up for grabs. This gives the government the chance to recoup their back taxes and you the chance to charge the homeowner interest on their missed payments. The other type is where the real estate itself goes up for bid. Often, this property is priced to sell. If you don't have a tremendous amount of competition, you can score properties for much less than they would typically go for on the open market. Here is some information about buying real estate cheaply.
Research the Property
Just because you have an opportunity to buy a property for much less than you would pay in a traditional setting, it doesn't mean you have less of an obligation to do your research. There probably won't be an open house or a real estate agent willing to take you on a tour of the home. You're going to have to do the legwork yourself. Some information should be provided by the county, but it will be far too sparse. Use this information, however, to give you a head start. Go to the address and see the house in person. Check out the neighborhood. If you can go inside, do, but that's unlikely to be an option.
Get Informed
Every county has their own policies and customs when it comes to holding delinquent tax sales. Many won't hold more than one or two a year, meaning you'll have plenty of time to get prepared. On the other hand, that means you won't get a chance to attend a few for the sake of getting warmed up. Get a copy of the rules and study them. Just adhering to those rules should be enough to put you at ease when the bidding begins. Finally, make sure you know what you're bidding on. Don't start bidding astronomical prices for a certificate, mistakenly believing that the property itself is up for grabs.
Know Your Price
One of the biggest mistakes you can make is walking into an auction without knowing exactly how much you are willing to spend. Remember, the government isn't going to wait around for you to come up with the funds. You will need to have financing in place before you start bidding. And you should have a top-end figure for your budget. This will keep you from getting caught up in the excitement. As profitable as delinquent tax sales can be, and as enticing as a piece of real estate may be, you need to have the ability to walk away.
