Tax Deed Sales - Can I just redeem and buy the property?

[Zach Staruch]

I'm in Lee County, Florida, which is a tax deed county, and recently attended my first online tax deed auction. A lot of the properties get redeemed by the owner before the sale and those that don't get redeemed obviously sell for more than the past-due tax amount.

Why can't I just reach out the the owner and offer to pay their past-due tax bill (so they can redeem it before the auction), and in exchange they sell the property to me for an agreed upon amount? I assume it's not that simple, otherwise everyone would do that. But what's preventing people from doing it?

I realize that a tax sale wipes out most liens, which could be advantageous in this situation. I also know that the owner will typically get the extra money after all taxes & fees are paid. But if we're talking a vacant lot worth only a few thousand dollars, why can't I just reach out and buy it from the owner directly as stated above?

[Kyle J.]

@Zach Staruch There are people who do what you are suggesting (reach out to home owners who are in distress and about to lose their property to a tax deed auction). So you could do this. However, if you do it, I would suggest a variation in how you worded your potential strategy. 

You wouldn’t pay their past due tax bill, and then in exchange have them sell their property to you. The main reason is, if you did it this way, once you paid their past due tax bill, they’d no longer be in distress (or at least significantly less) and would likely have no more motivation to continue with the sale of their property.

The way to do it would be to just negotiate a price to purchase their property from them, and then buy it. The past due taxes would get satisfied at close of escrow.

Sounds like you already know this next part, but I’ll mention it anyway. Since you’d be buying the property prior to the tax deed auction, any other liens on the property would also have to be satisfied from the sale proceeds, even if they would have normally been wiped out had it gone through the tax deed sale process. So you’ll also have to factor that in when negotiating your purchase price.

But this is definitely a viable strategy. Good luck.