Newbie to a Tax Lien Auction?

Newbie to a Tax Lien Auction?

If you haven’t been to an auction before, you should absolutely attend one to get a feel for its action and pacing—a dry run before you actually start putting your own hard earned cash out.  It doesn’t necessarily have to be a tax lien auction, just a well-attended public auction. 

It’s just an auction, why worry?

Auctions are purposely designed to get the best price possible for the seller (not the buyer).  Although tax certificate auctions are not quite as high-pressured as other types of auctions (REO, automobiles, etc) they still have many things going for them:

  • A high, overall excitement level
  • Your competitors sitting in the same room as you
  • The marketing concept of ‘scarcity’ – limited time and availability of a product

I remember my first auction.  It was years ago when I was attending a certificate exam.  During the break, I happened to walk by a large real estate auction.  I took a seat and immediately felt the adrenaline rush—ready to buy anything—the properties just looked so good and with everyone else bidding, it was hard to jump into the fray.  Luckily, I didn’t have a certified check with me or I would be the proud owner of a couple REO properties.

Live, open-outcry tax lien auctions are normally very well attended.  Those bidding fall into three categories:

  • Large, corporate tax lien buyers looking to buy as much as they can
  • Local, experienced investors looking for bargains not bought by the corporate buyers
  • Newbies looking for one or two properties but largely shutout by the two characters above

If you fall into the last category as a newbie—don’t worry!  Preparation for the auction goes a long way as long as you do your homework on what to expect.  

Here are the steps I recommend to make your auction a success:

  1. Get the latest copy of the entire list of delinquent tax lien properties. You can find these lists with the county tax collector or subscribe to a listing service such as Tax Sale Resources ( (You can even use my discount code for 10% savings: 1833520034FL3cef207f )
  2. Bring the list with you and highlight the liens you are interested in and have done your due diligence on.
  3. Make sure the list is very legible and bring a couple pens to cross out liens that were removed just prior to the sale so you don’t lose your place when the auction starts.
  4. Read the rules of the auction carefully—know when you must register, what type of funds to they take, how the auction is handled, what order will the sale go?
  5. Attend the practice auction—most auctioneers will spend twenty minutes or so at the very beginning to show how he plans to go thru the properties.
Do I Need to Hire a Tax Lien Attorney for Quiet Title?

Do I Need to Hire a Tax Lien Attorney for Quiet Title?

STOP!  If you’ve found this page because you’re looking for a TAX LIEN ATTORNEY to solve an IRS issue or Federal or State Tax problem, then click here for a directory of local attorneys in your state that can help you SOLVE your IRS/Government Lien Issue.

Find a qualified local TAX LIEN ATTORNEY in your state to help you NOW!

If you’re looking to hire a tax lien attorney to help you with your investment (tax lien certificate, tax deed, quiet title), then keep reading below!

If you purchased a tax lien or tax certificate in a state that does not have a strict judicial foreclosure process, then your more than likely going to need to hire a tax lien attorney to file for quiet title if your lien does not redeem.  However, this step is not always required.  It really depends on what you are going to do with the property. 


What is a quiet title action?

An action for quiet title is a lawsuit that you, as the tax deed recipient, file with the court to eliminate any future title claims against the property and remove what’s called the “cloud on title”.  Tax deeds are the least defensible form of ownership for a property.  The taxpayer or mortgage company on the property could claim that they were never notified that they owed taxes.  Many times, there may have been a death of the property owner and the heirs never realized they lost the house for taxes.

The ONLY Five States Where You Should Buy Tax Lien Certificates

The ONLY Five States Where You Should Buy Tax Lien Certificates

I get the questions all the time…what are the best states to buy tax lien certificates in?  Like all real estate investments, the natural answer to this is to only buy delinquent tax certificates in areas that you know best—your local market or areas you have other real estate investments in.  However, the explosion of online auctions and wealth of due diligence information on the web has now given us the ability to invest in just about any state that sells tax liens.  I’m not limiting my buying to just Arizona and Colorado which are near me, I now can buy anywhere in the nation.

So, now, there is competition among states for investors—what separates them are their statutes governing tax lien investing (do they favor the investor or the taxpayer?) and the ease of buying the liens (are the auctions online and is the assessor’s information up-to-date?).  Feel free to post your comments and reasons why you think I’m wrong, but below are the only states I feel you need to invest in.

Florida Tax Lien Certificates

Florida tax lien certificates should be at the top of everyone’s list for many reasons: the ease of buying liens at the online auctions, the laws and processing of tax payments are very investor friendly and the online information from assessment data to tax data is very current and accurate compared to other states.  Florida sets the bar for all the other states that sell their property taxes and will set the trend going in the future.  The main downside that there is a lot of competition out there the bring rates down quite a bit—but with Florida being the largest tax lien certificate market out there, you can usually find a niche to buy at higher rates. You can also find out more about Florida tax lien certificates in my Kindle e-book called: A Beginner’s Guide to Investing in Florida Tax Lien Certificates.


So Many States, So Many Ways to Invest in Tax Liens

So Many States, So Many Ways to Invest in Tax Liens

The laws that define tax liens and tax deeds vary like flavors in an ice cream shop – some are similar but not one is alike.

First, let’s talk about how states sell their delinquent taxes.  There is a split among states—some states sell tax deeds at auction direct to the public.  These are known as “tax deed states”.  They include:

  • Alaska
  • Arkansas
  • California
  • Delaware
  • Idaho
  • Kansas
  • Maine
  • Massachusetts
  • Michigan
  • Minnesota
  • Nevada
  • New Hampshire
  • New Mexico
  • Oregon
  • Utah
  • Virginia
  • Washington
  • Wyoming

Other states (the focus of my tax lien website) sell their tax liens “tax lien states”.  These states choose this method because they can recoup their lost tax revenue quicker and it’s a cheaper option for them because they do not have to send out delinquent tax notices and begin foreclosure—they simply pass the costs on to the investors.  Twenty-two states plus DC and Puerto Rico sell their taxes as liens to investors.

The method that they sell these liens varies widely.  Most tax lien states sell through some sort of public auction—either live or online.  If the liens are sold at this auction, there is usually a way to buy the liens directly “over-the-counter”. A few jurisdictions sell their entire pool of delinquent liens in bulk to one buyer—usually a bank or tax lien servicer that specializes in managing tax liens.

Just What is a Tax Lien?  How to Invest in Tax Liens – The Basics

Just What is a Tax Lien? How to Invest in Tax Liens – The Basics

A tax lien, just as any other lien, is a security interest granted over someone’s property to ensure payment on an obligation is made.

Local cities and counties all rely on property taxes to fund their police and fire departments, parks, and vital government services for the general public.  They use their legislative powers to ensure taxes are paid once, twice or even four times a year on all property they deem taxable – most land, houses, and even personal property.  If those taxes are not paid when due, the local jurisdiction creates a tax lien on the property that carries rights to enforce payment through foreclosure or other means.  These tax liens can then be sold to private investors who will have the same rights to enforce payment as the local jurisdiction.

Three Tax Lien Investing Strategies for the 2012 Florida Delinquent Tax Auction

Three Tax Lien Investing Strategies for the 2012 Florida Delinquent Tax Auction

Continuing on from my previous post on how to prepare for the 2012 Florida delinquent tax auction this June, I mentioned the selecting a strategy prior to the Florida tax auction should be one of the first steps you take.  Some investors may just be interested in only a few properties, but if you’re serious about getting into this market, you’ll need to have a large number of properties ready to bid on.