Texas Tax Lien Auction Questions

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Texas Tax Lien Auction Questions

Andrew McAfee
Temple, TX · Member since 2018 · 4 posts · 0 votes

Hello all,

I am reviewing a list of properties for an upcoming tax lien auction in my Texas county, and I have some questions about how to evaluate the properties.

1. How do I know if there are secondary liens or anything besides taxes owed on the property? And how would I know the amounts owed?

2. How would I officially transfer ownership of the property to myself if I purchase one? And at what point would I do this? After the 2 year redemption period ends?

3. Due to the 2 year redemption period in Texas where the former owner can buy back the property, would I simply hold the property and wait for the redemption period to expire before performing any renovations?

4. The list of properties has a column for "Purchaser and Purchase Amount", and one of the properties has an "intervener" listed which looks to be a mortgage company. How can one buy a property prior to the occurrence of the tax lien auction?

Thank you,

Andy McAfee

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Andrew PostellPro Member
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
4y

What the??  @Andrew McAfee how was your post AFTER @Bruce Lynn responded to it?  Bruce, do you have some crazy telepathic skills or something?  Anyway, I would suggest here that the TYPE of tax lien auction is critical here.  Meaning, a property tax foreclosure auction would erase just about all liens on a property here in Texas.  The city might allow some grass mowing liens on it but property taxes erase nearly everything else.  Now, an IRS foreclosure auction would be entirely different.   Based on the "Redemption Period" you mentioned that leads me to believe that you are referring to a property tax foreclosure auction.  For most improvements, as long as they are "reasonable" then the prior owner would be required to pay you back +10% of that amount.  So don't do anything too crazy over what is needed and your investment would be reasonably protected.

And not only do you have to wait 2 years for the redemption period to be over so that they can't buy it back you would also need that same period of time to even finance the property.  So whatever  you purchase and put into it....that amount of money will have to stay there until you hit the 2 year period (or 6 months if it was an investment property prior).  

I also have not seen the "intervener" reference before.  Usually the county/city is pretty helpful with this stuff so feel free to call them and be nice and they are usually willing to help.

Hope all of this makes sense.  Thanks!

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  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    4y

    #1....you need to do a title and lien search.

    #2....county or attorney prepares the deed and normally will file it for you.  Typically you will get this 3-4 weeks after the auction, although it could take longer.  I think the longest for me was about 4 months, but that is unusual.

    #3...typically yes.....if you do reno and they redeem, they probably don't have to pay for any or most of the reno.  Few people redeem, but as the world turns, you do a nice reno, those inevitably will be the people who decide to redeem.

    #4....not sure what this is, never seen that....maybe it is a private tax lien company that lends to people to keep them out of the tax sale, although reviewing the Bell County list, maybe it is the one against Carrington, which is a normal mortgage lender.  Not unusual at all that they have foreclosed and have not yet paid taxes.  In my experience they tend to pay the morning of the sale and it will be withdrawn from sale.

    FYI....Bell is typically very competitive.  Get there early to register.  The 2-3 times I have been to Bell almost everything sold very close to market value, and no where near the minimum bid, unless the minimum was near market value.

    In Bell you pay by cashier's check the same day you buy within a couple of hours after the sale.

    Good luck.

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  • Corey GrantPro Member
    Investor · Livingston, TX · Member since 2016 · 68 posts · 17 votes
    4y

    I'm interested in knowing more about this myself!

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  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    4y

    @Andrew McAfee   Also, where did you get the list of properties?  If you get it from the county, they have a nice list of rules and notices that answer many of these questions.   Unfortunately if you are looking at the legal notice published in the newspaper, I think typically that list of rules and procedures does not make it there.

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  • Arnie Abramson
    Texas Tax Sales Services · Merit, TX · Member since 2014 · 256 posts · 166 votes
    4y

    During the Redemption period you can do work on the property if it falls into the category as posted in the code which states that if the work done is to MAINTAIN, PRESERVE AND SAFEKEEP  the property you can be reimbursed for that as well including the 25% penalty fee.  We advise the investors we help to get a licensed inspector for the property and his report will not only tell you what is necessary to bring it up to code (thereby certainly hitting the proper qualifications) but also providing pictures before any changes you make so you would have before and after pictures.  Just be careful not to UPGRADE as that would probably not fall into the proper category.  Let me know if I can help.

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  • Andrew McAfee
    OP
    Temple, TX · Member since 2018 · 4 posts · 0 votes
    4y

    Thank you, Bruce, for the information. It sounds like the title and lien search is a very critical step. I will be researching that process more today. Also, I see that you are in Coppell. Before moving to Bell County, my office was just off of I-635 and Belt Line, and Coppell is a beautiful city.

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  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    4y

    What the??  @Andrew McAfee how was your post AFTER @Bruce Lynn responded to it?  Bruce, do you have some crazy telepathic skills or something?  Anyway, I would suggest here that the TYPE of tax lien auction is critical here.  Meaning, a property tax foreclosure auction would erase just about all liens on a property here in Texas.  The city might allow some grass mowing liens on it but property taxes erase nearly everything else.  Now, an IRS foreclosure auction would be entirely different.   Based on the "Redemption Period" you mentioned that leads me to believe that you are referring to a property tax foreclosure auction.  For most improvements, as long as they are "reasonable" then the prior owner would be required to pay you back +10% of that amount.  So don't do anything too crazy over what is needed and your investment would be reasonably protected.

    And not only do you have to wait 2 years for the redemption period to be over so that they can't buy it back you would also need that same period of time to even finance the property.  So whatever  you purchase and put into it....that amount of money will have to stay there until you hit the 2 year period (or 6 months if it was an investment property prior).  

    I also have not seen the "intervener" reference before.  Usually the county/city is pretty helpful with this stuff so feel free to call them and be nice and they are usually willing to help.

    Hope all of this makes sense.  Thanks!

    2Reply
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