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Updated about 3 years ago on . Most recent reply

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Tax lien question can I pay before it goes to auction?

Posted

There is a property that has tax liens on it that I am interested in.
I know the address, how much is owed, etc etc...

Do I have to go to a tax auction in order to pay the past due taxes on it or can I pay them now somehow?

and if I can pay them now somehow...

I remember hearing on one of the BP podcast shows that there is a way to register or verify that you paid the taxes so that you have the first opportunity to pay them when they come due again before they would go to auction... 

can anyone remind me how you do that as well? please and Thank You for any time taken to help me with these questions !

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Ned Carey
  • Investor
  • Baltimore, MD
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Ned Carey
  • Investor
  • Baltimore, MD
ModeratorReplied

@Chris Sonnleitner I have been doing tax liens for 15 years. Yes you can pay someone else' taxes for them. But only do this if you are feeling generous because it gives you NO rights in the property whatsoever, including no right to be paid back. 

The only way to get any rights as an investor is go to the auction and buy the lien. It might also be possible to buy the lien after the auction if no one buys it at the auction. However not all municipalities allow that and any good property will sell at the auction. 

Yes if you buy a property tax lien and the owner does not eventually redeem (pay the taxes due) you can wind up owning the property free and clear. Your tax foreclosure will wipe out at mortgages or liens against the property. 

However it is not that simple usually at the auction you are either bidding down the interest rate you receive or you are bidding up the price you will pay for the property. Sometimes you are doing both at the same time. 

And as @Joe Martella says the laws vary tremendously from state to state so you need to learn the laws specifically where you invest.

  • Ned Carey
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