Auction Property With A Federal Tax Lien

[Bradi Gross]

My husband and I are considering purchasing a home at auction that has a large federal tax lien on it. Can someone explain further the details of the 120 redemption period the IRS has? I was also recommended to get a Title Commitment pre-auction, what does a Title Commitment cover? Thanks for any/all help.

[Jay Hinrichs]

Originally posted by @Arnie Abramson:

The IRS has 120 days to redeem at 6%.  My guess is that you will not get a title commitment if you intend to purchase it at a tax sale.  What state are you in?

back in my day and maybe that changed but the rate was 9% I have bought numerous properties with federal tax liens and have never had one redeem.. NOT one..  I had them pester us into paying some tax for the person who lost it.. but not redeem it outright. 

the risk is if you do improvements past making the house safe from the environment.. they don't have to pay you back for any rehab you did to it.. 

you wont get title insurance until the 120 days is over.

these were frankly my favorites..  90% of investors are scared and don't understand or they need to borrow money and cant.. so its perfect for the true all cash investor.. knocks out a lot of competition and i have gotten some smokin deals on those.