I purchased a home that was sold at tax auction (TEXAS) ???. The home was not homestead exemption; therefore the redemption period was only 6 months. I have had the home for 11 months and I am now trying to sell it. One title company informed me that I would need to wait 3 years and now another has told me that I will need to wait one year. The problem is now that closing is scheduled next week?? With the last title company I was told that they would not be able to close on the property until June. I am confused by all of this since I did receive a sheriff deed from the tax auction; the property is not homestead exemption. Any thoughts??
Welcome to the wonderful world of tax sale investing!
I’ve gone through this too. Consider yourself lucky that you found a title policy with just a year wait.
The former owners actually have one year to file action challenging the validity of the tax sale, so the title policy underwriter is just trying to make a safe decision, thus the one year wait.
If they are paying cash, they can add some exceptions to the policy and get it closed, if buyer agrees to exceptions. If it’s a bank loan - well - you’ll probably just have to wait until June.
The buyer can get the earnest money back from title company. One idea is change the closing date till June, then rent the house to them until then.
Here is the law:
§ 33.54. LIMITATION ON ACTIONS RELATING TO PROPERTY SOLD
FOR TAXES.
(a) Except as provided by Subsection
(b), an action relating to the title to property may not be maintained against the purchaser of the property at a tax sale unless the action is commenced:
(1) before the first anniversary of the date that the
deed executed to the purchaser at the tax sale is filed of record;
or
(2) before the second anniversary of the date that the
deed executed to the purchaser is filed of record, if on the date
that the suit to collect the delinquent tax was filed the property
was:
A) the residence homestead of the owner; or
(B) land appraised or eligible to be appraised
under Subchapter C or D, Chapter 23.
(b) If a person other than the purchaser at the tax sale or
the person’s successor in interest pays taxes on the property
during the applicable limitations period and until the commencement
of an action challenging the validity of the tax sale and that
person was not served citation in the suit to foreclose the tax
lien, that limitations period does not apply to that person.
(c) When actions are barred by this section, the purchaser
at the tax sale or the purchaser’s successor in interest has full
title to the property, precluding all other claims.
thanks for the information! You live and learn.
Indeed, no big deal though. I bet you make a big profit in the end!
Bighat
Norm I was reading your post because I’m thinking about investing in tax liens in Texas. Did you get the property sold in June ? Just wandering how it worked out ?