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I wanted to attend this property auction but I have some questions. First off let's say the property address and the owner address are the same. I am going to assume the owner still lives at the site. If this is so, do I then have to go through the eviction process if i win the bidding? Secondly, let's say I win the bidding on a house for $10,000. I pay the money and the property is mine right? Are there any hidden costs such as if the people owe a mortgage, will I also assume that cost? Will any other costs be disclosed at the time of the auction? Help please! Thanks!

2007-11-03 05:05:43 · 3 answers · asked by blr8t2 2 in Business & Finance Renting & Real Estate

Acer, thank you for clarifying what a tax lien sale is, however if you look at my title I am asking HOW it works. I never planned on buying something and owing a mortgage. This is why I came here and asked what it's about.

2007-11-03 12:21:05 · update #1

3 answers

When you buy a tax lien you are only buying a lien. It adds you to the list of liens on the property. If the property sells you get paid back with interest. If the property owner pays their taxes current, you get paid with interest. If they don't pay their taxes you have to continue to pay them for three years before you have the opportunity to get the deed to the property. That of course costs you more - around $350. If you get the deed to the property any lien holder has the right to redeem and can pay you what is due and get the property. If no one does and the owners still live there you do have to go through the expense of evicting them. Then, you should go to court to quiet the title, this removes any additional liens, etc on the title. To actually get to this point is rare. More than half are paid back within a year. It's not as easy as they make it sound on tv!

2007-11-05 10:40:14 · answer #1 · answered by Meredith H 2 · 0 0

You have a very skewed notion of what a tax lien sale is. You are buying the tax lien, NOT the property. Tax lien sales are a means of governments collecting unpaid taxes by selling THEIR liens on properties which have unpaid taxes. Once you have procured a tax lien, the property owner will have a specified time in which to pay off the lien, at which time you will get back your investment plus some interest.

In order to gain ownership via tax lien, the property owner must fail to redeem. Then you must initiate foreclosure proceedings and evict the owner. THEN, you still assume any OTHER liens which may be in place against the property, INCLUDING unpaid mortgages.

What will you do if a mortgage happens to be more than the property is worth right now ?

FYI, 99.9% of tax liens ARE redeemed by the owner involved.

2007-11-03 08:16:45 · answer #2 · answered by acermill 7 · 0 0

You have to do your research. If the address are the same, drive by the property and look and see if they live there. If they do live there, yes you would have to go through the eviction process. Yes there are hidden costs, you need to do the research and see how many mortgages and judgments if any against them. A good place to start is a title company in Montezuma County and the county recorders office. Best of luck to you.

2007-11-03 05:43:30 · answer #3 · answered by ziggymo2 2 · 0 0

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