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Tax Deed Vs Tax Lien (3)


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Tax Deed Vs Tax Lien (3)

  1. 1. Tax Deed Vs Tax LienDifferent states either sell tax liens or tax deeds to tax delinquent investors. Tax Deed states sell theactual property to you when an owner is delinquent for a number of years. Some states will sell youthe Tax deed, however the original owner still has the right to redeem their property from you. Somecounties allow the original owner to redeem their property the next morning after the auction andothers will allow longer redemption periods up to a few years.There are 2 ways the state get to sell properties:1. The state forecloses, then owns the property and auctions it off as the seller; and2. The state obtains the power to sell from the court but doesnt own the property;Interest payments do not go either to investor or state because when a state owns a property,redemption is lost. Thereby, interest payments accrued from the effort of redeeming the property likein Texas and Tennessee are lost too. Redemption is never lost however until property is sold in thesecond process. If there is no bidder, original owner continues to own it until 5pm of the next day ofthe auction.In California, properties become delinquents after July 1, if not paid. There is no auction after 5 years,where power to sell can only be obtained and scheduled for auction sale. In California, county onlyhas the right to sell a July 1, 2007-delinquent property on 2012 and actually sells the property on2013 and half.What happens then between 2007 and 2013? Purchaser gains the right over the land.Immediate property rights is the advantage of tax deed. If a property is delinquent at 2003, propertywill be auctioned on 2008. When a bidder wins the property, he/she can immediately occupy theproperty and evict delinquents. The drawback though is it is a cash business. Though checks areaccepted, purchase price is paid within 24 hours or on the time of auction. Failure to pay immediatelybans the bidder from future county auctions forever.