Tax Liens and Forclosure: How it works and what to do if you buy foreclosures…
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The world of foreclosures is typically perceived to be a rough and tumble world, but if you are interested in real estate, and are willing to dig and find the deals, it is a great way to build your nest egg. Elaine Zimmerman has the details.
Form WKYT:
The real estate boom has a dark side for many struggling homeowners. As property values soar, so do property taxes. Many cities are giving homeowners a double shock by increasing the property tax rates as they increase the tax valuations of the properties.
In Memphis, TN, the city is proposing a $.54 per $100 of value tax increase translating into $540 for every $100,000 in value. Many cash-strapped municipalities are facing the same scenario. These large increases in taxes are hard on everyone, but especially impact those on fixed incomes or struggling families who have encountered unemployment or other financial setbacks in the recent past.
In the past three years, many highly skilled professionals from the airline, high-tech, manufacturing and other hard-hit industries have lost jobs and been re-employed in lower skilled professions, earning much less than in their previous professions. Some of the explosion in refinancing has been fueled by the struggling unemployed and re-employed.
Tax sales are a means of generating lost income from delinquent taxpayers. They are divided in two categories: Tax Lien Sales and Tax Deed Sales. What you are bidding on at these sales is very different.
During a Tax Lien Sale, what is sold, is the public sale on a delinquent taxpayer’s debt. Each county holds a sale, usually once a year. This may only be a legal notice in a newspaper. No public auction may be held. The winning bidder has not purchased the deed to a property. The bidder has paid the delinquent taxes to the County. In exchange, the purchaser is given the first lien position on title, ahead of mortgages, deeds of trust, and judgments, subordinate only to State and Federal tax liens.
Read the rest of the article here.
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