News from 2011 Marion County Tax Sale
Well the Tax Sale for Marion County (Indiana's Largest) has come and gone. We were not able to purchase as many liens as we hoped for, but the sale had a surprising silver lining. The sale software that we developed for the research and the sale was a big hit with many investors we talked to. Check back soon to see the BETA test of this software that will be available soon.
What are Tax Liens?
As a homeowner, you have an obligation to pay your property taxes. If you fail to do so, the tax authority can take action against you. This action usually comes in the form of a property tax lien being placed on the property for the amount of the delinquent taxes. These liens are then sold to investors at a public auction, so that the local government can collect this lost revenue to run local services.
When you bid on a tax lien sale, you are bidding on the tax debt. You are not going to come away from a tax lien sale owning a property. In fact, you will be paying off the owner’s tax debt in exchange for first lien position on the title. The homeowner now owes you ahead of mortgage lenders, deeds of trust or anyone with a claim against the property. These sales are held at public auction, with the highest bidder winning the tax lien. To verify this position, the buyer receives a tax lien certificate.
Now, when the delinquent homeowner pays off their tax lien debt to the buyer, the buyer can consider an interest penalty of 10%. This interest rate is state mandated, so to clear the lien from the title the owner must pay the principle of the lien plus 10%. If the tax lien debt is not paid back to buyer in full, plus interest, within 1 year of the sale, the buyer has the right to claim a Tax Deed for the property and becomes the owner free and clear. This is where buying tax liens becomes quite profitable.
If you would like more information about buying Tax Lien in Marion County, Indianapolis, Indiana please join our Mailing list.
