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How To Find Tax Delinquent Properties In Your Area

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What Does It Mean To Redeem Property

How to find Tax Delinquent Properties in your area

The defaulting taxpayer, grantee of the owner, or any mortgage or judgment creditor must payall outstanding taxes in addition to levies, costs, assessments, and rent and interest to the bidder up to 12% within the year redemption time deadline. A bidder cannot later redeem property that they won the bid on in the tax sale, on behalf of the defaulting taxpayer, in order to relieve themselves of receiving the delinquent tax payer’s property by tax deed and to instead receive the majority of their bid money back through that disallowed redemption of the property.

What Is A Delinquent Tax List

A delinquent tax list is a public record and kept on file with your local county clerk. These lists outline property addresses where the property owners have fallen behind on paying their property taxes.

As soon as a lis pendens or warning notice is officially given to a property owner, the warning is recorded and the matter becomes public knowledge. Every city and county/township will maintain a list of these tax delinquent properties.

Where Do You Find All This Tantalizing Info

Your first source of information is the local newspapers. The county will publish the tax lien properties list twice before the sale. Once you see the list, you can do your homework on each property that interests you.

The taxing authorities put the properties up for sale, mostly by auction. Some hold online auctions, and others are live at the county courthouse. Online auctions make investing from anywhere possible, which means more competition for each property.

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How To Buy A Tax Lien Property

To buy a tax lien property, youll attend an auction. At the live auction, you can bid on the certificate. Typically, there are many investors there trying to get the same property. The county will usually choose the bid with the lowest interest rate, but it varies by location.

When you buy the tax lien certificate, you have the right to collect from the homeowner. If the homeowner doesnt pay up, then you can foreclose on the property.

Since this is a blind sale, its important to do your due diligence before bidding on the tax lien. Find out as much as you can about the property including its condition, potential value, and if its vacant or occupied.

Dont get caught up in buying a tax lien that doesnt pay off. Ideally, the homeowner would pay the debt. Youd earn interest on the deal and be able to turn around and do it again.

If the homeowner doesnt redeem their property taxes, though, you become the proud owner of the home after the redemption period ends. If the home isnt worth anything, though, you lose your entire investment, which is why due diligence is important.

Your Servicer Might Set Up An Escrow Account

How to Find Tax Delinquent Properties in Your Area

After demanding repayment of the amount it paid for the taxes, penalties, plus interest , your servicer will probably set up an escrow account for the loan. Each month, you’ll have to pay approximately one-twelfth of the estimated annual cost of property taxesand perhaps other expenses, like insurancealong with your usual monthly payment of principal and interest. This money goes into the escrow account. The loan servicer then pays the cost of the taxes and other escrow items on your behalf through the escrow account.

What Gives the Servicer the Right to Set Up an Escrow Account?

Many mortgages have a clause that gives the lender the ability to establish an escrow account basically at any time it chooses. The servicer sets up and manages the account on behalf of the lender. To find out if and when the lender can set up an escrow account for your loan, read your mortgage contract and any other relevant documentation you’ve signed, like an escrow waiver.

The downside to having an escrow account is that you’ll have to make a bigger payment to the servicer each month. On the positive side, having an escrow account saves you from having to come up with a large amount of money when tax bills, and perhaps other bills, are due.

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What Is A Tax Lien

A tax lien is a legal claim against the property of an individual or business that fails to pay taxes owed to the government. For example, when a landowner or homeowner fails to pay the taxes on their property, the city or county in which the property is located has the authority to place a lien on the property. The lien acts as a legal claim against the property for the unpaid amount that’s owed. Property with a lien attached to it cannot be sold or refinanced until the taxes are paid and the lien is removed.

When a lien is issued, a tax lien certificate is created by the municipality that reflects the amount owed on the property, plus any interest or penalties due. These certificates are then auctioned off to the highest bidding investor. Investors can purchase tax liens for as little as a few hundred dollars if it is a very small property. However, the majority cost much more.

Investors can purchase property tax liens from a municipality, allowing them as the new lien owner to collect payments with interest from the property owner. In some cases, they may foreclose and attain title to the property.

Tax Liens By The Numbers

First, let’s address growing property tax values. In King County, Washington, property values increased 9% from 2021 to 2022. As a result, a total of $6.79 billion of property taxes were assess in 2022, an increase of almost $200 million from the year prior. In some counties in Texas, over 95% of Texas residential properties increased at least 20% in value in 2022. In total, governments are assessing more and more property taxes. It’s estimated that an additional $328 billion of property taxes were assessed across the United States in 2021.

It’s difficult to assess nationwide property tax lien numbers for a few reasons. There is no single governing body over all property taxes county assessors value your property, and county treasurers collect it. In addition, though aggregated reports exist, they require extensive aggregation of data that may be outdated by the time all information is assembled.

With that said, the National Tax Lien Association estimates the United States generates roughly $21 billion of delinquent property taxes each year. It also estimates that between $4 billion and $6 billion are posted for sale to the private sector each year.

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Why Does The People Of California Pay Properties Taxes On Their Automobiles

The people of California pay property taxes on their automobiles. This is because the state legislature wants to plow any additional money from increased property value back into the education system, and its easier to calculate that amount on a per-property basis.

However, some of these taxes are collected as a fee by the city in which you live, so it may not be relevant to you if you dont live in California. California taxes individuals on the value of their property and those taxes are based on where you live. When they pay property tax, the people of California consider the total value of your home and its grounds to be taxable.

If you own a car, it is also considered taxable by California. It can be quite confusing when you are filing your state taxes. For example, if you own a property in California, you will have to pay property taxes on your home and car.

This is because the cars are considered personal property and the owner must pay taxes. This is true even though in most other states, the cars are seen as not taxable because they are personal property that is not used for business purposes. Automobiles are considered personal property in the United States and each state has its own laws on how to assess and collect taxes on them.

Can You Sell A House With Property Taxes Owed

How to Find Alabama Tax Delinquent Properties

The short answer is no, you cannot sell a house with property taxes owed. You can create a deal where the property taxes will be satisfied during escrow or just prior to closing. This would then allow the house to be sold.

Remember that all liens—including back property taxes—must be satisfied prior to a real estate closing.

This is why it is so crucial that the wholesaler work these back taxes into the costs of putting together a tax delinquent deal. These costs must be covered by one of the parties before the property can be sold.

If you have questions on whether you have included all of the liens in your calculations, you can also have a title search run by a title company to verify and check for additional liens on a property.

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Are Irs Tax Liens Public Record

If a legal claim is made against your property in order to satisfy a tax debt, the IRS will file a Notice of Federal Tax Lien. This is a public document and serves as an alert to other creditors that the IRS is asserting a secured claim against your assets. Credit reporting agencies may find the notice and include it in your credit report.

How To Scrub A Tax Delinquent List

Scrubbing a marketing list is the act of cleaning up and removing any discrepancies or red flags. Working a marketing plan with a clean list of data starts your campaign on the right foot, ensures you are marketing to your target audience, and ultimately sets you up for success.

Scrubbing a tax delinquent list—or any lead generation list—can feel overwhelming. However, the effort is ultimately worth it as you can save time in the long run.

If you are using a paid list service, many offer a duplicate removal search option. Even if this feature costs a few dollars, it is worth your time to pay it. This service will search for duplicate addresses and/or name combinations.

If you are doing your own list scrubbing manually, check for the following duplicate or suspect items: duplicate email addresses, spammy-sounding email addresses, or any names who have previously unsubscribed from your marketing lists.

This is also a great opportunity to proofread and correct any obvious typos.

Investors can also run their lists against the National DNC Registry. This will alert the investor to any names on the list who have specifically registered with the DNC Registry and do not wish to receive any solicitation calls.

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Timeline For A Delinquent Tax Sale And A Tax Lien Sale In Baltimore

  • : Jack is sent a tax bill
  • : Jack cant pay that bill.
  • : Jack is considered delinquent and put on the delinquent tax list. Smart investors try to buy Jack out of his debt and buy his condo. It would be a private transaction between Jack and the investor, and the county wouldnt get involved.

BUT, if Jack doesnt pay his taxes or sell, the county steps in.

  • : A Final Tax Sale notice is mailed to him. During that same time, Baltimore County publishes a complete list of properties eligible for tax sale twice, in two newspapers. Read the paper, and you’ll find out what is for sale.
  • Early April: The city sends Jack another notice about the impending tax sale.
  • May: The annual tax sale is held.

What is a tax sale, you ask? The quick answer is a sale of real estate as a result of delinquent taxes. It doesnt matter if they are one mortgage payment away from their very last one, or they still owe the full monty. If they dont pay those taxes, they could lose their home.

Now, lets get back to that list.

Where Can I Find Tax Liens For Sale

How to Find Tax Delinquent Properties in Your Area

You can call your county’s tax collector directly to find out the process for buying tax liens. Some counties will also advertise the process on their website, as well as providing instructions for how to register as a bidder.

When counties list auctions on their websites, they will also provide information about the properties up for auction, when they go to auction, and the minimum bid. This list can help you identify if there are any properties you are interested in based on their location, property type, size, and minimum bid.

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If A Tax Delinquent List Is Not Available Online

When it comes to obtaining delinquent tax lists, it is important to remember that each state and municipality will have their own set of rules for information procurement. In the event your area doesnt allow curated online lists of delinquent tax properties, youll need to think outside of the box. Fortunately, doing so isnt very difficult. Sometimes gaining access to a delinquent properties list is as simple as calling the closest tax assessor just because the information isnt available online doesnt mean you cant ask over the phone.

Know The Values In The Area

Familiarize yourself with the area. Are the homes worth as much as you thought? Is it an area tenants would want to live or if you fix and flip, could you make a profit? Take into consideration the amount you pay for the taxes and penalties. Will you make a profit if you take possession of the property and either rent it out or flip it?

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Tax Deed Overview For Property Owners

A tax deed application is the action initiated by a tax certificate holder. The tax deed application is a legal document that begins the process wherein the Clerk of the Circuit Court sells the property to the highest bidder at public auction. This process is known as a Tax Deed Foreclosure.

Property owners have 2 years from the date taxes become delinquent before they risk loss of the property. As stated in Florida Statute 197.502, after the 2 year period has elapsed and taxes remain unpaid, the certificate holder may file a tax deed application with the Tax Collectors office.

The property owner may retain the property by redeeming the tax deed application any time before the property is sold at public auction. In other words, if delinquent property taxes are paid off while property is in a tax deed application status, the applicant is reimbursed for their total investment, accrued interest and the tax deed sale process is stopped.

As part of the Tax Deed process, the Clerk of the Circuit Court sets the sale date and notifies the applicant of the additional costs associated with the sale, which the applicant must pay. Please note, the tax deed foreclosure process can take months to complete due to statutory requirements governing tax deed sales.

Where Can I Get A Listing Of Propertiesavailable For Sale

How to Find Tax Delinquent Properties

An online listing is available beginning Friday, November 5, 2021 of real and mobile home properties to be sold and will be updated weekly. The tax sale ad will also appear in the Post & Courier on the three preceding Wednesdays. If you sign up as a bidder for the tax sale, a tax sale listing will be given to you the day of the tax sale. Personal property tax sales are advertised periodically throughout the year in a newspaper of general circulation for two times prior to the personal property tax sale and also published online on our web site.

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How The Delinquent Tax List Works

So what happens when a property owner fails to pay their taxes?

It’s pretty simple really.

Every county has a Treasurer who is responsible for collecting and tracking the payment of these property taxes. When people don’t pay their taxes, the Treasurer’s Office will create a running list of who still owes them money .

Some county Treasurers will refer to this list by different names, like:

  • Delinquent Tax Roll
  • Tax Assessor’s Roll

Though it can go by different names in different counties they’re all referring to the same thing.

When a property owner fails to pay their taxes, their name will be added to this list. Once they’re on this list, the county will wait anywhere from 1 5 years and when enough time has passed, the county will come in and take these properties from their respective owners via tax foreclosure. Regardless of how much money an owner may have invested in their property if they don’t pay their taxes, they will lose the entire property. Forever.

How Much Interest Can I Earn As A Bidder In The Annual Tax Sale For Real And Mobile Home Property

The interest due the bidder may not exceed the opening bid amount submitted on behalf of the Forfeited Land Commission , which is the amount of the outstanding tax liability due on the Property plus the current years taxes. The bidder interest increases by 3% each quarter of the redemption year for a maximum of 12% possible interest earned. Interest is earned up to the opening bid amount where it will cap.

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How To Use Your Tax Delinquent Properties List

Obtaining a tax delinquent property list has proven incredibly beneficial to lead-seeking investors who prefer to work with motivated sellers. Few homeowners prove to be more motivated than those who are behind on their taxes their situation typically justifies a timely and efficient sale. It is worth noting, however, that not all municipalities share the same policies regarding delinquent taxes. There are a great deal of local governments that dont place an emphasis on tax-delinquent foreclosures, or even how often they are pursued. Some tax delinquent homeowners are more motivated than others .

On the other hand, if tax delinquencies are acted upon in a swift and decisive manner, real estate investors may be able to help motivated sellers get rid of their properties in a timely fashion. In the event tax delinquencies serve as a significant motivating factor, there are a number of things investors can do with their property lists.

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