One of my neighbors works for the municipality and gave me a list houses about to go up for tax sale. She said the are really far behind. I am not sure how this works. I am just going to contact the owners to see if they want to sell but what happens in a tax sale? If they only owe 5k in taxes, do they just sell the house to the highest bidder?
Depending upon your municipality this is not an auction of the houses but an auction where you bid to pay the delinquent taxes. If you are the winning bidder then you own a tax lien on the property and will earn interest on this lien. The homeowner will have a certain period of time to cure (pay) the lien after which you will be able to seek a tax deed to the property (within local guidelines).
There is a difference between a tax lien sale and a tax deed sale. If it’s a tax deed sale, if you win, you own the property (even if it had a mortgage on it-depending on your state of course). If it’s a tax lien sale, then you make interest on what you paid and after the redemption period if they have not paid it back, the property is yours (after foreclosing on it).