Redeemable Tax Deed Auction- South Carolina

[David Kinsey]

I’m in the early stages of research on tax deed investing in South Carolina, and hoping to get some clarity on the following questions:

- In the case of bidding at redeemable tax deed auctions (South Carolina), what happens to any "overbids" in both redeemed and non-redeemed properties? Do the investor or original owner have an opportunity to recoup these excess funds?

- Do bidders frequently bid around the amount of tax owed (the starting bid), or does it trend towards the perceived value of the property? (I assume this answer is intricately linked to the former question)

- Are damages incurred at the property during the redemption window the responsibility of the winning bidder or the original owner (i.e., does an investor need insurance on any winning bids)?

- Is the process to quiet a title cumbersome in a redeemable tax deed state (I assume less tricky than a tax lien state but more than a tax deed state)?

[Don McAlpine]

Hey David - 

1.  If there is a redemption you will receive your overbid back, plus the interest.  If it isn't, you have rights to take possession of the property and the overbid will be available to any liens that were released prior to the sale and/or the previous owner.

2. The bids will always move toward the current market value of the property.  That being said, there are often bidders who bid properties up to levels that will not allow for a profitable investment.  Set your max bid in advance and stick to it.

3.  Damages will be the responsibility of the winning bidder if you choose to take possession of the property.  You do not have a right to possession during the redemption period and whether or not you can insure your interest is a question for an insurance professional.

4. How long it takes to clear a title has more to do with the history of transfer of the property than whether it's a tax lien or tax deed state. If the property has had a mortgage on it with the current owner (and the owner is living) then clearing the title shouldn't be problematic since the lender would have required title insurance for the loan. If there are multiple inter-family, quit claim transfers or cash sales in the property history you should expect a more lengthy timeframe.

Whether or not you *need* to quiet the title has to do with what you intend to do with the property if you take possession.  If you don't plan to hold it, it may be advantageous to sell if for cash to another investor who can quiet or clear the title during rehab.  If you plan to keep it then the cost of clearing the title should be factored into your bid.

These are my observations.  Before bidding you should have full knowledge of every state and local statute related to tax sales, because if you miss something there's no one to blame but yourself. Research, research, research...