The Truth about Tax Lien and Tax Deed for Sale The local governing authority has the right to sell the property once the homeowner fails to pay his tax property. If a homeowner dwells in tax lien state, he will be given an opportunity, with a given period, to pay back the amount to the investor, who now holds the tax lien certificate of the property. If the homeowner fails to do so, then the property will be transferred to the investor. Tax lien is considered a claim over the property that has outstanding back taxes. Failure to pay the tax property is one of the major reasons why more and more homes are being foreclosed. That is why investors grab the opportunity to seek distressed properties in an auction. The governments per state allow homeowners to pay for their obligations within a given period. Be mindful that every state has different rules and regulations in terms of redeeming the payment -- some states would allow two years in paying back the amount to the tax buyers. Purchasing tax liens certificates is a certain return of interest paid by the homeowners. Another benefit of investing on tax lien certificate is the chance to own the property. Holding the property could create a good business. Opportunity like selling or renting the property can create another source of income. Looking at the drawbacks of this business venture, if the property is not properly checked there is a big chance of getting a property of no value. A meaningless property could lead to two things: no interested buyer and abandonment of the property. Another risk that an investor may face is during an auction, the investor will be paying a greater amount of money without having the guarantee if the homeowner can really pay the taxes and interest even if given a certain period. On the other hand, tax deed sale refers to a legal document that specifies property ownership. Also commonly called â€œtitleâ€?, it occurs when the government places the delinquent property in an auction and the investor decided to pay the back taxes lower than the market value thus making him the owner of the said property. This process is considered the fastest and easiest way to owning a property. The investor is directly having business with property owner in a bargaining price. However, the problem with tax deed is that the investor does not have any knowledge on how much the property really costs. Tax deeds for sale can also be risky, especially when the property has many liens. There are states that do not eradicate existing liens without the proper knowledge of the state laws concerning tax deed. Hence, when investing in a tax deed or tax lien, be mindful of its advantages and disadvantages and be guided accordingly. It is important to conduct a thorough research on the property to realize its worth.
Ted Thomas, considered by industry insider as Americaâ€™s Tax Lien and Tax Deed Authority, created a training program online that will help professionals and investors to learn strategies and techniques on gaining a six figures income in a speed-learning platform. You can visit his website and learn more about selling and purchasing tax lien certificates and tax deed.