Tax Deed Auction Process

Tax Deed Auctions are an opportunity to make great investments. This is a brief introduction.

When a property owner does not pay her/his property taxes, an investor pays the taxes with a set interest rate and receives a Tax Certificate .The property owner can pay off the Tax Certificate at any time by paying the investment plus interest, with a minimum of 5% interest.

Any time after two years, the investor can have the property auctioned off to get her/his investment plus interest. This is called a Tax Deed Sale.

The tax collector's office schedules an auction with a minimum bid of all the outstanding taxes and lists the Address, Parcel Number, Assessed value, Final Judgment, and other information. If the property owner lives in the house (Homestead), 50% of the Assessed value is added to the minimum bid.

Note: This is the Assessed Value, not the Just Value of the property. If the property owner lives at the house, the assessed value cannot be increased by more than 3% per year. Over time, the Just Value can be much higher than the assessed value. Our listings show the Just Value instead of the Assessed Value.

The tax collector notifies anyone that has a lien on the property about the auction. This could be anything from mortgages, judgments, income tax liens, nuisance liens, demolition liens, home owner association liens, and others. This gives them an opportunity to bid on the property and protect their lien.

If the property goes to auction, all liens except government liens are wiped out. The auction winner gets immediate possession of the property. However, this does not give the new owner Clear Title. The new owner can rent out the house, live there, burn it down, or sell it with a clouded title. Mortgages cannot be written without a clear title.

The new owner can get a clear title by doing a Quiet Title action in court or waiting 4 years. After obtaining clear title, the property can be sold with a mortgage.

The property owner can avoid the auction at any time before the sale by paying the back taxes.

This information is not intended as legal advice. Please be sure to do your due diligence before bidding.