Tax Sale Expenses

Transcript:

Hey there, it’s Casey Denman from TaxSaleAcademy.com and welcome to our weekly question segment. This week’s question comes to us from Corey.

Alright,, I think it’s Tindell . . . alright, the question:

What expenses am I responsible for when I buy a tax sale property?

So there are a few expenses you’d be responsible for. Let’s go through them one by one.

Obviously, the purchase price will need to be paid.
We also have recording fees in some areas, which are often nominal, like $10 or $20.
If an auctioneer or online platform is handling the sale, be sure to check for buyer’s premiums, some charge 10-12% as a buyer’s premium.
In some situations you’ll also have wire transfer fees, credit card processing fees or similar fees based around the type of payment you utilize.
That’s it for most of the sale based expenses.

When you’re buying a tax sale property you’ll also usually be required to pay for the entire years worth of property taxes during the year of purchase. So if you buy a property December 2021, you will still owe taxes for the entire year of 2021, they aren’t usually prorated like conventional real estate purchases.

Next we have any outstanding liens – typically private party liens are extinguished, but governmental liens will be your responsibility to pay or negotiate.

If you wish to obtain title insurance as part of your selling strategy, then you’ll also need to budget clearing the title.

The finally, you’l obviously have maintanence cost of the property and any marketing or selling related expenses.

Listening to me say all this is probably sounds like a lot, but it really isn’t too much. Especailly if you go in and budget for it correctly. Tax sale properties are often sold far below market value so there’s plenty of margin to account for all of these expenses and then provie a hefty profit as well in most cases.

Tindell, I hope this answers your question. If you have a followup or if anyone watching this video has a question, please feel free to leave it below this video or any of our other videos right here on YouTube.

Thanks so much for watching. And as always, check out TaxSaleAcademy.com to grab a copy of your free book or if you’d like to take advantage of the most detailed and step by step training we offer thorugh The Tax Sale academy. See ya next time!