Tax Lates. So what happens when a property owner fails to pay their taxes?
Every county has a Treasurer who is responsible for collecting and tracking the payment of these property taxes. When people don’t pay their taxes, the Treasurer’s Office will create a running list of delinquent tax notices.
When a property owner fails to pay their taxes, their name will be added to this list. Once they’re on this list, and when enough time has passed, the county will force tax foreclosure. Regardless of how much money an owner may have invested in their property, they will lose the entire property.
Tax foreclosure works a bit differently in every state, so it’s important to understand the rules wherever you’re working. The properties being auctioned off at the tax sale are not the ones we’re interested in. Why? Because by the time a property has been foreclosed on and put it up for auction – it’s too late. The typical investor will have to bid against dozens of other hungry buyers with some serious competition. In many cases, these auctions can spiral out of control, with bidding wars that push the price of any good property far beyond its actual market value… and if you’re someone who needs to find a good deal, this is a problem. Now – is it possible to get good deals at a tax sale?
When you have to fight against dozens of competitors, you don’t have an unfair advantage and you’re not in a position of power. I’ve learned the hard way that when you’re not able to call all the shots and play the game by your rules – there is a much higher likelihood that you’ll walk away empty-handed and/or make some really stupid decisions.
For a number of reasons – I’ve found that the tax sale model just doesn’t work.
Now keep in mind – if the property owner wants their name to be erased from this list, they can do it at any time by simply paying off their property taxes (and all the late fees they’ve incurred along the way). As long as they pay off these taxes prior to the county’s drop-dead date, they will maintain full ownership of their property.
This list is kept up-to-date every day with the delinquent (or non-delinquent) status of each property owner. It’s a set of information that is constantly changing, with new names being added and old names being removed as people pay (or don’t pay) their property taxes.
Now let me be very clear…the properties being auctioned off at the tax sale are not the ones we’re interested in. Why? Because by the time a property has been foreclosed on and put it up for auction, it’s too late.
At many of these property auctions, the typical investor (aka – you) will have to bid against dozens of other hungry buyers and deal with some serious competition, which can be a recipe for disaster. In many cases, these auctions can spiral out of control, with bidding wars. The push in price can become far beyond its actual market value… and if you’re someone who needs to find a good deal, this is a problem.
Is it possible to get good deals at a tax sale?
When you have to fight against dozens of competitors, you don’t have an unfair advantage.
When we’re talking about a “Delinquent Tax List”, it’s important to distinguish what this list is and what it isn’t. This is the county’s digital record of all the property owners who owe back due taxes. Their properties haven’t been seized by the county yet. These properties are still privately owned by their respective owners. These people are just months (or even weeks) away from losing their property outright if they don’t act soon. Now here’s the real kicker. Since the county hasn’t yet seized these properties, they haven’t published this information for the general public to see. Why is this an important distinction? Because nobody else knows about these opportunities yet.
There are a lot of people on this tax lates list who are more than willing to sell their property at a steep discount. They aren’t going to advertise their desperation. Instead, they need someone like you to seek them out and make the process idiot-proof for them. When you have this list, you’re holding some very lucrative information because you know who needs help.