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At a land tax auction, properties will be sold to the highest bidder. Although there are some advantages, there are some of the pitfalls to be conscious of with this kind of auction.
Pitfall #1 -You May Overbid
Don’t get carried away in the heat of bidding. Land tax auctions are just like any kind of auction. Know ahead of time how far you’ll comfortably be able to go and don’t exceed that limit. There’ll always be another piece of land – probably during the same auction – that you can bid on within your spending limit.
Pitfall #2 -There are Many Scams Related to This Kind of Auction
There are numerous sites on the Internet touting quick get-rich schemes by buying tax-lien certificates at auction. Some suggest interest returns as high as 24 percent, while others may claim you’ll get the property if taxes aren’t paid. This may be possible in some states, but not others. In California, for example, the only way land that’s available after non-payment of taxes occurs at a land tax auction. It won’t do you any good to search out distressed properties and attempt to buy a tax-lien certificate in the hopes of eventually snagging the property.
Pitfall #3 -You'll be Tempted to Buy Without Seeing the Property
Before you place a bid on property, be sure you know what you’re bidding on. If possible, go and inspect the land before the auction. If that’s not possible, try to obtain photos and as much information in advance before you bid. Remember that pictures can be altered. A swamp on the property may not be visible in a photo, but you’d see it if you inspected the land.
Pitfall #4 -You Will Not be Told About the Possible Liens or Title Issues
You may make a winning bid on property at a land tax auction only to find out later there are outstanding liens or title issues on the property. Do a title search ahead of time to determine whether or not the property has any liens
Pitfall #5 -Properties are Sold "As-Is"
Websites of county tax collectors contain valuable information on property at upcoming auctions. Be sure you know that such properties are sold “as is” and carry no guarantees as to title, condition or location, etc. Any outstanding property taxes are paid directly from the proceeds of the sale.
Pitfall #6 -The Owner has a Right to Redeem the Property
Be aware that the owner may be permitted to redeem the property sold at the auction by paying the winning bidder the amount paid plus interest. Check with an attorney to be sure what the laws are in your state.
Pitfall #1 -You May Overbid
Don’t get carried away in the heat of bidding. Land tax auctions are just like any kind of auction. Know ahead of time how far you’ll comfortably be able to go and don’t exceed that limit. There’ll always be another piece of land – probably during the same auction – that you can bid on within your spending limit.
Pitfall #2 -There are Many Scams Related to This Kind of Auction
There are numerous sites on the Internet touting quick get-rich schemes by buying tax-lien certificates at auction. Some suggest interest returns as high as 24 percent, while others may claim you’ll get the property if taxes aren’t paid. This may be possible in some states, but not others. In California, for example, the only way land that’s available after non-payment of taxes occurs at a land tax auction. It won’t do you any good to search out distressed properties and attempt to buy a tax-lien certificate in the hopes of eventually snagging the property.
Pitfall #3 -You'll be Tempted to Buy Without Seeing the Property
Before you place a bid on property, be sure you know what you’re bidding on. If possible, go and inspect the land before the auction. If that’s not possible, try to obtain photos and as much information in advance before you bid. Remember that pictures can be altered. A swamp on the property may not be visible in a photo, but you’d see it if you inspected the land.
Pitfall #4 -You Will Not be Told About the Possible Liens or Title Issues
You may make a winning bid on property at a land tax auction only to find out later there are outstanding liens or title issues on the property. Do a title search ahead of time to determine whether or not the property has any liens
Pitfall #5 -Properties are Sold "As-Is"
Websites of county tax collectors contain valuable information on property at upcoming auctions. Be sure you know that such properties are sold “as is” and carry no guarantees as to title, condition or location, etc. Any outstanding property taxes are paid directly from the proceeds of the sale.
Pitfall #6 -The Owner has a Right to Redeem the Property
Be aware that the owner may be permitted to redeem the property sold at the auction by paying the winning bidder the amount paid plus interest. Check with an attorney to be sure what the laws are in your state.
