How Do Tax Deed Sales Work?
A tax deed sale is where a local government or county has foreclosed on a delinquent property owner and has received title to their property. The local government or county then sells the tax deed at auction allowing the winning bidder to obtain property ownership at a discounted price (sometimes for as low as 20% of its assessed value). Some local governments and counties allow a delinquent property owner a right of redemption a chance to reacquire their property. Even in this situation, you would come out ahead. You will receive the amount of money you bid at auction plus interest. For example, Texas requires a flat 25% penalty to be added to the amount paid at the sale. If Mr. Sanders were to purchase a tax deed in Texas for $10,000, and the delinquent owner redeemed the property two weeks later, Mr. Sanders would have made $2,500, in just two weeks. Additionally, in most situations you can use the property during the redemption period. For his $10,000 investment, Mr. Sanders can re
