Real Estate News

Homeowners who failed to sell their property during pre foreclosure and have failed to meet their tax obligations , the government will seize their property. The government often sells properties that it has acquired through tax foreclosure to people who can pay the taxes that are owed, providing an excellent real estate investing opportunity.. They are sold in proceedings called tax foreclosure sales (or tax deed sales). The government does this to recover the taxes that the original homeowner did not pay.

In selling these properties under tax foreclosure, the government offers the liens, the unpaid taxes, the interest for those totals, and the selling costs involved to interested investors in a public auction. In case there are many prospective buyers of these liens, the winner is awarded the properties in any of the following methods:

-Bid Down the Interest Method – The government fixes a maximal rate of return and the bidders have to stay within that rate limit specified. The investor accepting the lowest rate of return among the bidders is declared winner of the tax foreclosure property. In cases of ties on the bids, the impasse is resolved through a random or rotational method.

-Premium Method – In the premium method, a real estate investor who is willing to pay the highest premium on the lien amount is declared the winning bidder. This method is used and preferred in some parts of the country for selecting the winner at an auction.

-This method is know as the rotational selection – The investor listedat the top of the list of bidders gets the first offer of the liens in the rotational selection method in the auction. In case he declines, the investor next in line is made the offer. The first bidder, who declined in the first round, is offered another lien only after an equal chance has been given to all potential investors that are included on the list.

-Random Selection Method – In this method in an auction, the potential investor gets selected through a random process commonly done through the use of computers.

-The ownership bid down method – The lien in this method given to the bidder who buys the property at its lowest cost. If he buys it at 90% of the property cost, and in case of redemption of the lien by the original owner, this investor would only be eligible for 90% ownership and the remaining ownership of 10% would go to the original owner of the property in question.

Not all liens get sold right away in an auction and when this happens, the unsold liens remain in the hands of the government entity that conducted the auction. It could conduct another auction subsequently. In the meantime that the liens are unsold, the unsold liens are called “struck” liens.

Make it a point of completely understand the type of auction you are going to. The last thing you want is to miss out on a good investment because you don’t understand the auction procedures.  If you are interested in learning how to double your income doing what you love, then you need to check out Raymond Aaron right now.