A Tax Deed Auction Can Help You Get A House For Less Money

When a homeowner fails to pay their property taxes within a specified period of time, the government will seize the home and sell it at auction. Commonly known as a Tax Deed Auction, the bidding begins at the amount of taxes owed. So, for example, if a homeowner owes $1450 in taxes then that will be the minimum bid accepted for the home. In some states, the minimum bid will be the taxes owed plus expenses rather than simply the back taxes. In either case, these kinds auctions are often a great way to purchase real estate cheaply.

What's the difference between a Tax Deed Auction and a foreclosure?

A Tax Deed Auction is not the same thing as a foreclosure. A foreclosure occurs when the homeowner stops paying his or her mortgage. In this case, the bank will try to sell the home in a traditional manner or put it up for auction. Although this method can be less expensive than purchasing a new home, typically the minimum bid is the amount the homeowner owes on their mortgage, which can be a little or a lot of money.

When to get legal advice

If you are considering purchasing a home through a Tax Deed Auction, you should consult with a lawyer so that you are aware of all of the rules and regulations your state has in regards to the auction process. Some states have a waiting period after the auction is complete to allow other bidders to make a late bid. In Texas, this period of time is six months, during which time, if the homeowner comes up with the owed taxes, then they are able to reclaim their home and you receive your money back for your auction purchase. Make sure you understand exactly what your rights are and what the government's rights are during these proceedings.

Purchasing a home is a great investment, and with a Tax Deed Auction, it is possible to get a house for a lot less than you might expect. However, with so many options available (because of tough economic times) there are probably more choices now than ever before. It will behoove you to do your homework about the house that you are interested in and make sure that it is everything that you want and that you need.

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