How Do You Buy A Tax Lien Home?
Looking to get a house for a fraction of the cost? Consider investing in tax liens. When a person owes a significant amount of debt or taxes, the government can impose a tax lien on the person’s house. When you buy a tax lien, you’re buying the right to pay off the delinquent tax owed by a homeowner. Here’s an example of a tax lien situation: A family owes a hefty amount–say $1,000–in back taxes, so the state issues a lien on their house. Instead of keeping the lien for themselves, the state can auction off the right to buy the lien on their property. You, as an investor, purchase the lien for $5,000. Now the family has a certain amount of time–usually about a year, but two to three years is also common–to pay off the past due tax plus any accrued interest to you, the person who purchased the lien. Step 1 Realize the risks involved with purchasing a tax lien. You’re at risk when a proper title search isn’t completed and you find out that there’s another lien on the property that ta
