Tax Liens
Certificates and Tax Deeds
Definitions
Definition: County Tax
Sale
Answer: Depending on the
state the sale may be selling tax liens certificates
or tax deeds.
Tax Lien State
The county in which the property is
located sells the lien certificate at a sale or
auction. Some states sell the lien for the
delinquent amount while others allow bidding to
begin at that price. The purchaser of the tax lien
collects interest (predetermined by the state) from
the home owner on the amount that was paid for the
tax lien. If the tax lien (with interest) goes
unpaid during the redemption period, the investor
may foreclose on the home. Unlike most
foreclosures, when a tax lien is foreclosed on, all
other liens and mortgages are abolished and the
property would be owned "free and clear".
Typically the lender will pay off the tax lien to
avoid losing their house and/or property.
Tax Deed State
The county government sells the deed to the
property at a public sale or auction. The benefit
for investors is the ability to purchase property
at discounted rates, often for the amount owed in
taxes. When an account becomes delinquent, the
property is listed at the tax assessor's
office, some are even online. Properties with homes
are usually purchased by investors (often referred
to as sharks) prior to foreclosure.
Definition: Tax Lien Sale
also know as Tax Liens Certificates (TLC) Sale or
Auction
Answer: The sale,
conducted by a governmental agency, of tax liens
for delinquent taxes on real estate. The lien
consist of unpaid real estate taxes, assessments,
including penalties, advertising costs and fees. If
the property owner fails to pay the delinquent
taxes during a specified period of time, the county
government can sell what is called a Tax Lien
Certificate on the property.
Definition: Tax Lien
Answer: Is a lien imposed by law upon a
property to secure the payment of taxes. A tax lien
may be imposed for delinquent taxes owed on real
property or personal property, or as a result of
failure to pay income taxes or other
taxes.
Definition: Tax Liens
Certificates
Answer: The
Certificate represents the outstanding taxes on the
property. Many county governments sell the Tax Lien
Certificates to investors so that the county may
recoup the delinquent taxes. In exchange for the
purchase, county governments offer the investors
interest on those Tax Lien Certificates and the
guarantee that those Tax Lien Certificates will be
paid off within a predetermined period of time.
Interest accrues on the Tax Lien Certificate over a
specified course of time until the taxes are paid.
A Tax Lien Certificate is a first position lien
(Senior Lien) on the property. In most states, if
the property owner does not redeem the Tax Lien
Certificate within a specified time period the
holder of the certificate can ask the county
government to begin procedures to auction the
property to the public. Proceeds from the auction
will pay off the Tax Lien Certificate
Holder(s).
Definition: Tax Deeds Sale
Answer: Is the forced
sale, conducted by a governmental agency, of real
estate for nonpayment of taxes. It is one of two
methodologies used by governmental agencies to
collect delinquent taxes owed on real estate, the
other being the tax lien sale.
Definition: Quit Claim
Answer: Is a term used
to describe a document by which a person (the
"grantor") disclaims any interest the
grantor may have in a piece of real property and
passes that claim to another person (the grantee).
By contrast, the deeds normally used for real
estate sales (called grant deeds or warranty deeds,
depending on the jurisdiction) contain guarantees
from the grantor to the grantee that the title is
clear. The exact nature of the warranties varies
from jurisdiction to jurisdiction. Quitclaim deeds
are sometimes used for transfers between family
members, gifts, placing personal property into a
business entity, to eliminate clouds on title, or
in other special or unusual circumstances.
The most common use for a quitclaim
deed is a divorce in which one party is granting
the other full rights to, and eliminating any
interest in, a property in which both parties held
an interest. If a husband and wife own a home and
divorce, and the wife acquires the home in the
decree, the husband would enact a quitclaim deed to
eliminate interest in the property.
Quitclaim deeds are also typically provided in
cases of tax deed sales where property is auctioned
off to pay outstanding tax debt. The auctioning
body is usually a local government, which claims no
interest in the property whatsoever, but is selling
it only to recover the back taxes.
Definition: Warranty Deed
Answer: Is a type of deed where the grantor
(seller) guarantees that he or she holds clear
title to a piece of real estate and has a right to
sell it to the grantee (buyer). The guarantee is
not limited to the time the grantor owned the
property—it extends back to the
property's origins.
Definition: Clear Title
Answer: Is the phrase used to state that the
owner of real property owns it free and clear of
encumbrances. In a more limited sense, it is used
to state that, although the owner does not own
clear title, it is nevertheless within the power of
the owner to convey clear title. For example, a
property may be encumbered by a mortgage. This
encumbrance means that no one has clear title to
the property. However, standard terms in a mortgage
require the mortgage holder to release the mortgage
if a certain amount of money is paid. Therefore, a
buyer with enough money to satisfy both the
mortgage and the current owner can get clear title.
Definition: Title Search
Answer: Is a process
that is performed primarily to determine the answer
to three questions:
- Does the seller have a saleable interest in the
property?
- What kind of restrictions or allowances pertain
to the use of the land (real covenants, easements,
or other servitude's)?
- Do any liens exist on the property which need
to be paid off at closing (mortgages, back taxes,
mechanic's liens, or other assessments)?
Anyone may do a title search and documents
concerning conveyances of land are a matter of
public record. However, it is often the case that
people choose to contact a title company or
attorney to conduct an exhaustive title search. For
example, a title report may also show any
easements, or recorded legal rights to the property
or portions of the property. A previous owner may
have legally given a neighbor the right to share
the driveway, or the city may have a right to
strips of the property for putting power lines,
communication lines, water pipes, or sewer pipes. A
few on-line services offer title searches for
relatively little cost, and their accuracy is not
inferior to what a title company or attorney will
offer; however on-line businesses rely mostly on
electronically available information, and for that
reason could at times be limited.
In the United States, the buyer of a property will
usually purchase title insurance, which protects
the buyer from any title problems that may arise
after sale (such as liens that were missed during
the title search). The title insurance company
issues a report and issues an insurance policy in
support of its findings. However, title searches
are most often carried out before contracting is
completed between parties and sometimes during the
escrow phase of a closing.
A title search is also performed when an owner of a
certain real property wishes to mortgage his
property and the bank requires from owner to insure
their transaction.
Generally, there are two main types of title
searching, a full coverage search and limited
coverage search; other types include non-insured
reports and foreclosure guarantee search.
Definition: Fair Market Value (FMV)
Answer: Is an estimate of the market value
of a property, based on what a knowledgeable,
willing, and unpressured buyer would probably pay
to a knowledgeable, willing, and unpressured seller
in the real estate market. An estimate of fair
market value may be founded either on precedent or
extrapolation. Fair market value differs from the
intrinsic value that an individual may place
on the same asset based on their own preferences
and circumstances.
Definitions Source: Wikipedia
|
The Average Person can Buy these Properties
How to buy tax liens certificates and tax deeds
properties? 
Follow this link