Tax Lien Certificate sales

[Joshua D.]

Hey guys, I have a friend who claims he knows someone who bought a house for $296 at a tax lien sale. This just sounds outrageous to me. He said he has another who bid and got one for $1293 at the county auction. Can anyone shed some insight for me on these tax lien sales? There is one coming up on October 24th I'd like to attend, but I know nothing about them. I don't even know who to contact for information! Thank you, Jordan

[Derek Peterson]

In general, PA is known as a tax deed state.  So when you go to the auction you are actually acquiring the property at the sale.  You certainly want to do your due diligence ahead of time to know what you are actually buying.  Furthermore, PA may have requirements that include assumption of other liens on the property - do your due diligence.  In addition, if you do acquire a property, you may have some additional title work that needs to be done before you could sell/finance it with a completely clean title.

I am not sure what area the properties you referenced are in or what the real estate market is like there, but if the homes were decent or had potential, where I am from (Central TX) the amount would have been bid up significantly from there due to the competition and real estate market conditions.  So based on what you highlighted in your post, several conditions could be present.  1) real estate market is flat, 2) area the properties are located in or the property itself is not desirable, 3) there are other factors that 'drive' up the actual costs on the property, 4) property taxes in PA are really low to begin with, 5) competition is low, 6) other reasons, 7) none of the above and they were in the right place at the right time.   The point is that you need to be sure to do your due diligence.  Sometimes some can see gold where others just see rock and dirt.  Rest assured, there are great opportunities that are available - I myself am a tax sale investor.

Finally you would find out about the tax sales (in most cases) from the county tax office (tax assessor, treasurer, etc...)