Tax Deed sales

Hey guys,

Question. I’m very interested in Tax Deed Sales. I heard Ted Thomas speak at the Real Estate Expo on NYC this weekend. He gave alot of useful info but one thing I don’t understand is

Is it ever really possible to get the house/property free and clear after the auction? Ted explained that all liens included mortgages are whiped away by the county/govt and that the property tax lein takes presendent over all other liens. But how is this possible? And why wouldn’t the bank just purchase the deed?

I will do a title search on every property whether it be a tax deed sale or a tax lien sale but I figure almost all properties will come back with liens/mortgages on them and once you win the tax deed won’t you be responsible for them?



Where are you buying? I’m not an expert, but having some experience in a couple states, the laws were different.

If you let us know where you are located maybe someone from that state can answer your questions.

Good luck, B-

BTW, I know you mentioned NYC, but that doesn’t mean you are purchasing in NY. B-

Hey Betty,

I live in NJ but I’m looking to purchase in FL and PA.


Unfortunately I have no experience in those states (I’m TX and VA); but we do have a number of investors on this site who should be able to help you.

Wishing you success.

I’m interested in TX as well, just a little further away. Can you talk about you experiences in TX related to my questions?

I just bought a house at a tax deed sale, and I own it free and clear (have to pay cash – I paid about 30% of what it will be worth once it’s fixed up). However, I’ve found it nearly impossible to get title insurance for 3 years, which means I can’t re-finance it (which I wanted to, so I could rent it out), and can’t SELL it.

I’m speaking with attorneys about clearing the title, but if anybody has any thoughts, I’d love to hear them.

Can’t you just file a Quiet Title Suit?

I don’t know – can you explain a little more how it works/what it costs, etc?

I’m assuming that’s what the attorneys will do, but my meetings with them are coming up next week, so at this point I don’t know. The more info I have going in, the better though…

yeah, I’m sure that is what your attorney is going to do. It will cost you around $300-$500 to file.


I buy in both flrida and arizona. The laws are different. For example.
Arizona has 3 year redemption that you can apply for the deed immediately seeing as you are the only bidder at the ‘auction’. lol. AZ is 16 % but remember that is on a monthly basis which works out to something like 1.3% per month.
Florida is similar and is suposed to be a tax lien state in that the percentage is monthly 18% or 1.5% per month. After 3 years you can apply for deed. However, here the catch, Even after you pay the back taxes and application for deed. The house MUST go to courthouse steps and be auctionsed to highest bidder, that may be u or somebody else. If you survive that, u get the house.

The only surviving lien that I know of are the IRS. and there is a distnct chance they can come back and tkae the house away from you.

You can go to tha uctionand buy the liens there. Dont get cuaght up in tyhe bidding frenzy, u can lose your shirt. I tend to buy ‘over the counter’ after the sales are done and I go thru the leftovers and get full % for the lien i buy.

I dont buy in texas text is a deed state,but from what I hear,when you buy a lien there, 1 day after you buy ti to 6 months down the road, there is an automatic 25% lump sum that needs to be paid to you. Anything past 6months, goes up to 50% lump sum payment to you. You need to also find out if the property has homstead exemption on it or is vacnat land, dfiffernt laws apply.

One last thing, take ted thomas with a grain of salt. I did get an abbreviated course from him and I was savvy enough to do my own reserach on the internet. There are a lot of people out there buying tax liens.

Just some brief info about TX. Texas is a lien-theory state; which basically means that as soon as you sign a lien (mortgage) for your property it is yours, not the banks. The owner holds the deed , the bank simply has a lien against it. It also means that the bank (lender) does not have to go to court to foreclose; nor is there a redemption period. A homeowner behind on payments (even by one day) can be served notice that they have 20 days to be current or face foreclosure. The house can be sold on the first Tuesday following the end of the 20 days. A homeowner has no rights to the property once it is sold, (no redemption period).

Homestead means that a property that is the primary residence cannot be taken from a homeowner to pay any debts NOT related to the house itself. You can lose your home for not paying your mortgage, taxes, mechanics liens, homeowner dues and special assessments. You cannot lose your home because you don’t pay your credit card bills or you were in an accident and someone sues you (for example). No one has to file for homestead, it is automatic if it is your primary residence. You do have to file for tax exemptions that come with homestead.

Last thing, title insurance is NOT a problem. Foreclosure properties clear title like all other transactions. You may have a problem with seasoning for the loan, but not title.

Hope this helps. Good Luck, Betty

Wanted to clarify, the information I gave in the previous posting was in regard to foreclosure (not paying your house payments) not tax liens.

For taxes in TX, the redemption period following a tax sale is 2 years if the property is a homestead, 6 months if it is an investment and 180 days if the sale is for foreclosure on HOA.

Trust this helps. Thanks, Betty