Paying Your Taxes on Time

195Property Tax Sale

Any time property taxes are not paid to a taxing authority by the tax due date. The taxes become delinquent. Then that can create a lien superior over any other lien including the mortgage. A tax judgement/Lien can be placed on the property, and will remain until the delinquent taxes, interest, penalties, fees and costs are paid.

The lien allows the taxing agency to sell the property to pay the delinquent taxes that are owed. It the property is sold for delinquent taxes and the redemption period has expired, the property owner and other parties with an interest in the property will lose all rights to the property, and the title is transferred to the new purchaser free and clear of any liens.

A tax sales is the sale of property by a taxing authority through an officer of the courts acting on a judgement to satisfy the payment of delinquent taxes.

The tax office will send the delinquent property owner and the note holder notices of the delinquent and impending sale. However, if the assignments were not properly recorded or the servicer fails to act, the sales can be throw out.

Once all State and County law proceedings are followed and if the homeowner has not responded to the tax office, the tax office notifies all interested parties in the property, and a tax sale or tax auction date is set. The sale of the property for non-payment of taxes may be announced in the local newspaper, and/or notices are provides to the note holder. The term tax sale and tax auction are used interchangeably and have the same meaning, the terminology differs according to the county or state.

The tax sale auction typically occurs at the county court house, similar to a foreclosure sale. On the day of the sale, the person with the highest bid successfully is the winner. The bid amount is usually enough to pay off all unpaid taxes and other expenses, penalties, interest, fees and costs due to the listing. At that time, all rights of the initial homeowner cease to exist, except for the redemption rights. Right of redemption is the act of paying the delinquent taxes, plus penalties, interest, and fees, after the tax sale/auction has taken place, but before the property is officially transferred to the tax sale purchaser. So if the initial homeowner elect not to redeem the property, the tax sale purchaser would own the property free and clear after the redemption period expires, or has expired and the deed is recorded. Each state has their own redemption period once it has been acquired at a tax sale auction.

If the tax sale purchaser pays more than the delinquent taxes and cost of the tax sale , the excess if called: excess proceeds.

The new owner of a tax sale property does not assume the mortgage payments, but rather he mortgage is extinguished and the new purchaser may begin the eviction process.

If there are no interest in the property, or no one successfully bids on it, the parcel in question becomes the property of the municipality, township, village, or town. Often, they do with the property as they please. Usually, it is listed with a real estate company and an attempt is made to sell it at the market value. Most counties are no in the business to acquire properties; Instead they merely want to recover tax dollars owed. Even if that means selling acquired real estate.