Expert: Dick Dennis - 10/30/2006

Question
Hi Dennis:
How does the process go for a person that wants to buy a home with delinquent taxes? Is it true that I would only have to pay the delinquent tax and what about the mortgage would it be my responsibility? I am looking into it but I can't find anything that will help me get started. This would be the perfect opportunity for me since I am a single mother, but it sounds too good to be true. Please Help!
Thanks!
Carol

Answer
Yes, Carol, it is too good to be true. For most people, that is. That's because most people are not willing to do the work that is connected with it. First, you have to keep your eyes on the legal section of the local daily newspaper or the local legal newspaper. Also, you can inquire at the county tax collector to find out when the tax sales are being held, usually once a year.

However, you may find that most of those properties are parcels of land in which most people have little interest,i.e. out in the desert, up in the mountains, etc. But once in a while there is a house that for some reason the taxes were not paid. You would show up at the auction as indicated by the tax collector and then you bid. You can be assured that if the property is worth anything, there will be a number of people there to bid against you. They recognize value, too. Most states hold tax auctions and the winning bidder gets a certificate, and if the owner of the property does not catch up with the tax bill over a specified amount of time, then the successful bidder may take over the house, or most likely, get repaid the amount of the winning bid plus a very rewarding interest rate. This could be a very good income if pursued properly.

Also, newer houses that may not have the taxes paid would be paid by the mortgage holder, if there is a mortgage. Then the mortgage holder would put the property into foreclosure, then you would have to bid at a foreclosure auction. And that is a totally different game.

So, if you're interested Carol, first thing you should do is to ask at the county tax collector.

I do wish you well.

Dick Dennis              dixiedee13@aol.com