Tax Foreclosed Homes Understanding the Auction Process
There is a great many infomercials punting the idea of investing in tax foreclosed homes in order to make big profits. While these infomercials are true, many of them are a little misleading because basically they really want to sell you a product. It is possible to educate yourself regarding the processes involved in investing in tax foreclosed homes, just by reading the right kinds of books and collecting information from the internet.
It is certainly best to arm yourself with some education and research on this subject matter before entering the real estate investment market. And the purchase tax foreclosed homes does allow for some good profits to be made.
It is a sad fact of life that in today’s credit crunch, many homeowners are feeling the pinch. The Internal Revenue Service has the right to foreclose on a persons property if they have unpaid income taxes. This in not a quick process, but if the home owner is also in default with his mortgage the process speeds up somewhat. However it is important to know that a Tax lien is superior to any other lien over a mortgage. So even in the lender forecloses on the mortgage owner first the tax lien will still have to be paid. Lenders who purchase foreclosure homes on auction always pay the tax liens, as if they did not the property would become the property of the IRS.
If you are an informed investor, it is also possible for you to buy tax foreclosed homes on auction. There are greater rewards in this method of purchase, but also greater risks, particularly if you have not done your homework.
The beauty of investing in tax foreclosed homes is that you are allowed to inspect the property prior to bidding. This is not the case with bank foreclosures as generally the homeowner is still resident.
There are a number of reasons for properties being sold at foreclosure auctions these include:
- Failure to meet the demands of mortgage repayments
- Failure to make real estate property tax payments
- Failure to make Income tax payments
- Personal bankruptcy
- Illegal activity by the owner
Tax foreclosed homes are either sold at a public auction or at a court auction, sometimes also referred to as a Sheriffs sale. In court auctions investors are not able to request discounts for early payment, pay in installments, modify the terms of the contract or transfer the title. This does make thing a little more sticky, but that is the way it goes. Some auction allow verbal bidding while others only accept bids as sealed written offers, so make sure you know what is required of you.
In “non judicial” states the foreclosure process proceeds much faster, generally around three months. In judicial states this process can take as long as eighteen to twenty-four months. For example, judicial states include:
- Indiana
- Connecticut
- Louisiana
- Florida
- Maine
- New York
- New Jersey
- North Dakota
- Pennsylvania
- Ohio
- South Carolina
(ArticlesBase SC #647087)
Article Tags:
mortgage
,Foreclosure
,foreclosed homes
,Foreclosure Homes
,foreclosed
,Tax Foreclosed Homes
,Auction Process
,Forecloses
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There is a great many infomercials punting the idea of investing in tax foreclosed homes in order to make big profits. While these infomercials are true, many of them are a little misleading because basically they really want to sell you a product. It is possible to educate yourself regarding the processes involved in investing in tax foreclosed homes, just by reading the right kinds of books and collecting information from the internet.
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