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#456538 - 02/02/17 07:11 AM Buying property from County Tax Sale
Arsi Offline
Junior Member

Registered: 02/02/17
Posts: 2
Loc: TX
Hello
Is this true?

I am looking to buy a small property from County Tax Sale. Someone informed me that if there are any liens on that property, they will be shed off, when the property is sold. So, lets say i am the winning bidder on Sale day and buy Real Estate that had 5 liens, i will get the title lien free and clear.

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#456539 - 02/02/17 08:22 AM Re: Buying property from County Tax Sale [Re: Arsi]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7676
Loc: Vermont's North-East Kingdom
Originally Posted By: Arsi
". . . let's say i am the winning bidder on Sale day and buy Real Estate that had 5 liens, i will get the title lien free and clear . . ."

If it works in Texas the way it works here in Vermont . . . . then the answer is YES. Your local Delinquent Tax Collector or the County Treasurer probably has a write-up on how exactly the process works in your area (a write up because the question gets asked so often).

However, there's usually a waiting period (the Redemption Period) before the actual conveyance occurs (here, it's a Year + One Day) during which time the Owner of Record OR any of the Lien Holders may appear to pay off all of the delinquent taxes and the costs of the sale (including the costs of notifying all of the known Lien Holders of the impending Tax Sale by registered mail).

Usually, what happens is that the 1st Mortgage Holder will come in a day or so before the end of the Redemption Period, pay off the accumulated outstanding taxes et cetera, and simply add that amount to the mortgage of the Owner.

When that occurs, you'll get refunded your purchase amount PLUS Interest . . . . here that Interest Rate is 1% Per Month or any part of a month (12% per annum) so it's worth while doing if you have idle cash sitting around.

Only twice, in attending Tax Sales for about 10 years, did I actually wind up owning a piece of property by this method; and I've researched hundreds of properties that have come up for Tax Sale, just so I wouldn't become the owner of some kind of booby prize.

Having a Tax Sale is a good method for communities to get Tax Payers to bring their taxes up-to-date; but don't get your heart set on gaining ownership of some neat little farm for next to nothing . . . . there's a catch (usually). More has been written regarding Tax Sales here on this Forum, if you do a search using "Tax Sale" (with quotes).
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#456543 - 02/03/17 08:42 AM Re: Buying property from County Tax Sale [Re: Vermont]
Arsi Offline
Junior Member

Registered: 02/02/17
Posts: 2
Loc: TX
Thank you for the info. I called the tax office and was told that even with Tax sale, the liens stay on the property, they dont go anywhere


Edited by Arsi (02/03/17 08:54 AM)

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#456544 - 02/03/17 09:50 AM Re: Buying property from County Tax Sale [Re: Arsi]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7676
Loc: Vermont's North-East Kingdom
If that were accurate, it would be a significant difference between Texas and Vermont.

I was involved (not as a litigant) in a property that had been transferred by Tax Sale and where a 1st Mortgage Holder was disgruntled and sued one of our local communities saying that they had not been properly informed in advance of the Tax Sale . . . . and they lost their interest in the subject property.

It was "You snooze and you lose !"

That Lawsuit is the reason that we now have Title Opinions or Abstracts drawn prior to the Tax Sales in order to more thoroughly insure all Lien Holders are individually and duly informed, and made aware of what the consequences may be. Simply posting notice in a local newspaper is no longer adequate . . . . we must actively seek them out.

I wonder how sophisticated or knowledgeable the person at the tax department was to answer your question in a legally competent manner.

Of course the Lien Documents will remain in the Land Records (that's "History"); the question will be whether they remain effective, or whether the results of the Tax Sale will have rendered them null and void and of no further consequence. Probably only a Texas Conveyance Attorney can answer that clearly.

There wouldn't be many takers at a Tax Sale if the property being sold were to remain encumbered with the current Owner's Liens and Mortgages . . . . but; as they say, "Texas is like a whole other Country !"
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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