When the owner of a piece of real property fails to pay the proper amount of taxes due, the governmental entity to which the taxes are owed places a claim, or tax lien, on the property to ensure payment.
The tax liens will allow the taxing authority to sell the property, usually in a public auction and often for the taxes owed or even less. This creates an opportunity for a person with the time to properly research this issue and the willingness to invest a little cash to obtain real estate at bargain basement prices.
Researching a tax lien is easy, once you determine the area in which you want to find a property being sold for a tax lien. All, or at least a significant portion, of the taxes on which the lien is based will likely be local taxes, so a visit with the taxing authorities in that area is the best place to start. Typically, tax liens are imposed by city or county governments, as well as school districts.
An internet search using the name of the area and the terms “tax assessor, “taxing authority,” “property taxes”, and “tax liens” and “property tax,” will provide a good starting point. In addition, the courthouse and the sheriff’s office normally have bulletin boards on which they lst dates and times of tax lien auctions.
Once the taxing authority is located, they should be contacted first by email or telephone. Upon request, the entity will provide either a list available in their office or a location online where the properties to be sold are listed.
Once a property is located that has potential, the prospective buyer should visit the property to determine the condition as well as any other characteristics which might play into a decision to bid on the property.
Since the buyer is not likely to want to invest the money into a full, professionally done title search on a piece of property which is not yet purchased, a quick title search in the county land records should be done. This may reveal any obvious problems with the property, such as easements that are undesirable, lack of access, and any federal liens. If the buyer is unable to conduct these cursory title searches themselves, many paralegals will do this for a small fee, or an attorney can be hired to conduct the search or, even better in the long run, teach the buyer how to do it themselves.
While at the property records office, notes should be made on the legal and physical descriptions of the property. These offices often have plat maps showing the location of the property as well. Property in the western United States use a block, grid survey system while those in the east, including Texas, use a variety of formats.
The current owner’s contact information will also be available at the office of the taxing authority. Often, a good deal can be struck if a buyer contacts the owner directly, preventing the need for an auction.