Transcript:
Welcome to our tax sale start series where we’ll take one specific topic and explain it to you in less than two minutes!
Today:
Let’s talk about the opening bid for tax deed sales.
So, with our previous starter series videos we’ve discussed tax deeds and we know that the tax deed process is where a property has delinquent taxes and the owner has a set period of time, usually a few years to come in and pay off those delinquent taxes to the county. If they aren’t paid off in time, the county will foreclose on the property through the tax foreclosure laws and then auction the property off.
So, where does the opening bid start? In the large majority of states the opening bid will be the total of the amount of back due taxes, fees associated with the foreclosure process for the county and any interest owed to the county. Typically this is a tiny fraction of the auctual value of the property and obviously can be bid up.
In some situations where a property was offered at one auction but failed to sell, the property could be reauctioned at a lower amount for less than what’s owed on the property. Sometimes it’ll even be reduced as far as a nominal opening bid amount of $50 or $100 depending on the specific state.
Now, with that said one, maybe two states, start their properties off at a percentage of the tax assessed value which is obviously more than the taxes owed, but still substantially less than the actual value.
Tax sales can definitely be an incredible way to buy properties at deep discounts!
I’ll see you next time on our tax sale starter series. Take care.