Tax Liens Sales

How exactly does a Tax Deed work?

I want to purchase a tax deed for a piece of land. I have done a lot of research but can't find anything on Tax Deeds that's in "plain english." Does having a tax deed make you owner of property? What if there is another lienholder on title(e.g. mortgage company)? Thanks a lot

Public Comments

1. If you want to get a plain English explanation, get the book called "The 16% solution" I'm sure you can get it at your local library, or get a cheap used copy on amazon or something. Basically what happens is when you bid at the auction, you purchase the right to collect unpaid property taxes, with interest. You essentially buy a lien on the property. State laws say how much interest will accrue, and how long the property owner has to pay. About 99.99% of the time, the property owners find a way to pay the debt before the deadline. In the VERY rare case that they don't pay, you can foreclose and take the property. Since the debts are redeemed such a high percentage of the time, you can't count on purchasing property this way, you can only think of it as a way to get good returns (10%-20%) on your investment money.
2. I 'asked jeeves" and when the county auctions off a property for unpaid taxes, it is one way to buy 'cheap' the mortgage however is not fulfilled and the one borrowing more than likely is still liable to pay the mortgage so there could be some problems with that phase of the transfer