Your Property Taxes And A Property Tax Auction
Posted on March 18, 2008 in the Property taxes category
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The National Taxpayers Union writes that as many as 60% of all homeowners are over-assessed and not in line with their home value. (“How To Fight Property Taxes” 2004 p.1) |
If you fail to pay your property taxes when they are due and continue to avoid paying them, you stand a good chance of accumulating penalties and interest. After a given amount of time, the county office can place a lien on your property. If you continue to avoid paying the property taxes, you home can succumb to the auction block. This can be done even if you owe an outstanding mortgage on the home. You or someone else is going to have to pay the outstanding balance owed on the property taxes. It is always best to pay the taxes, but if you do not, an auction can take place.
How the auction works is the county decides you have had ample time to pay the property taxes and you have made no effort to do so. They will then notify any lenders of intent to auction your property to recoup the taxes monies owed. Once the process starts, you still have time to save your property before the day of the auction. If you have the resources, you can apply monies to the delinquent property taxes and have your property taken off the auction block.
Once your property is deemed delinquent in property taxes, the county will add this information into the file with other properties that are going up for auction as well. Once this procedure starts, there is only one way to stop it, you have to pay the taxes and have it taken off the list. You will have to pay the penalties and any interest that has accumulated over the years. When you have a receipt stating payment has been made, your property is then safe from auction and you retain ownership.
If you do not pay the property taxes, the auction will go as planned. People sign up to participate in a property auction and are allowed to view information about the property before bidding starts. Many bidders will search the title to see if there are any other lien holders on the property in question. Even if you are a mortgage holder, your property can be auctioned off. The legalities of a mortgage are more intense then the auction itself. The county will put a minimum limit requirement on the property to recoup as much of the tax owed as possible and allow bidders to bid accordingly. Once some wins the bid, you have a new situation to handle.
Chances are, the winning bidder has searched the title and now knows who the mortgage lender is and where to reach them. The winning bidder does have a stake in the property and now it is a matter of obtaining the property from you as the owner in a legal sense. This is procedure is going to be lengthy and costly in some cases. You are wise to contact a property tax attorney before you let this matter get this far, because you will have more problems now than you had before with just owing property taxes.
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23 Responses to “Your Property Taxes And A Property Tax Auction”
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Great explanation of the property tax auction. We should be seeing more of these soon.
Hey, just wanted to say that your posts on taxes have been great starting points for me. Keep up the great content!
Its really an interesting article. You have very well brought out the importance of paying property taxes in a simple manner.
Home buyers have to beware of this fact as well. This can be a real problem for those that heven’t done their homework.
With the way things are in the economy and the amount of people that are in poor financial shape, this has certainly become more commonplace. Two weeks ago I was asked by a company that buys delinquent tax packages to do multiple appraisals on land and a few homes they were likely to own. The package included about thirty five properties!
Great explanation and very interesting article.
Awesome article, I know people here in the UK, who are getting cash together to go to the States in August and buy real estate, then rent them out as an investment.
heya. just dropped a note to tell you have a good blog here. very interesting real estate articles and very helpful. thanks!
ugh, i hate it when the bank does that to my house.
great information, we dont have taxes in my country though
Ismail, no taxes! nice. I think government can use taxes as a means of corruption. My grandfather owned 6 acres in a Georgia county. One year he was either sent a wrong tax bill or he did not pay the right amount. He only owed $300 dollars. Unknown to him was the fact the county put his place up for auction. It was a valuable piece of property that could have been used for commercial gain. I think they did it on purpose. Anyway, he was eventually able to get the situation resolved. The more power the government has to take away money and land, the more they are going to do it I guess. Cheers!
Great explanation about the property tax auction for bidder.
From time to time auctioneers post real estate tax sales on our site and i wonder what the outcome usually is.
Yeah, not paying your property taxes isn’t the greatest idea on the planet. In fact, just like not paying your income taxes, it’ll really come back and bite you in the you know what…and uncle sam is anything but forgiving.
Interesting, I can not tell you how many deals I have had delayed because of ” I didn’t realize there was a lien”
Nice post. You are exactly right, back taxes can cause you to lose your home. I can’t tell you the number of times I’ve helped homeowners to refinance with the main purpose being back taxes. In fact, it is reported on your credit report and you will not be able to refinance unless the back taxes are paid directly to the county with the refinance proceeds. I recommend to many, that an escrow account is a great idea to include with their mortgage, even if they are not required to do so. This way, the homeowner never has to worry about back taxes unless they stop making their mortgage payments.
I think that your texts on taxes are rally great resource for learning some new and useful things.
The mortgagee company will almost always pay the delinquent taxes if there is an escrow account or if they get notice. They will not intentionally let it go to auction.
We don’t see many tax auctions in my town but I expect that it might become a more common occurrence. Thanks.
Great explanations on the auctions going on after house tax problems, thanks.
I have actually been to a few of the auctions here in Austin, TX. It is a very interesting experience. It’s a great opportunity for investors but you have to know what you are doing. I have seem many new investors bid themselves into a losing deal.
The solution to everything is entrepreneurship.
Ask yourself a simple question. What is the name of our economic system? CAPITALISM. The system where the business owners are happy, the system of “money”, not “work”, not “jobs”.
Even with the current interest rates, families are losing their homes to the banks, let alone due to tax.
Saving money has become a “big thing” now. We have many clients who want to save money due to the current economy and have chosen to take up a virtual office.