What are Government Tax Sales?
Government tax sales are one of the most misunderstood, but highly lucrative, types of real estate sales in existence. Most government tax sales performed in the United States are carried out at the local government level. In most cases, tax sales result from delinquent property taxes, which are assessed at the local level. However, the IRS can also take control of property for unpaid U.S. income taxes and sell them at government tax sales. In most cases, government tax sales will include more than one property. Usually, tax sales are held only after a suitable number of properties have been assembled to collect an adequate number of potential buyers. This ensures competition in the auction process. The more potential buyers there are, the more likely it is that government tax sales will result in a recovery of losses for the government agency. In all cases, government tax sales must be published through approved methods. In most local cases, this includes the use of the local newspape
If someone does not pay their real estate tax, the government seizes the property and auctions it. If you bid $500 at the auction, you will own the property if, and only if, no one else bids more. If no one does, that may be because the property is worth less than nothing, meaning that it requires a large amount of repair, toxic waste removal, or other expensive work, that exceeds its value, and for which you (as the new owner) will have to pay.
A lien is a claim against the proceeds when and IF the property is sold. A deed is a legal document representing ownership in the property. More details are needed to know what you actually bought or are considering buying. Contact whoever is selling the lien or deed and ask them. If you don’t understand their answer, you should not be buying. My guess is that you DON’T become the owner for $500, but stranger things happen when the government is involved.
