Missouri Tax Lien

Member since 2024 · 3 posts · 0 votes

I live in Missouri, and am looking to dabble in real estate. In Missouri, they sell tax lien certificates. So, when you buy the tax lien, you do not own the property. There is a 1 year redemption period where the owner can pay their taxes. If they don't repay their taxes, then you can go through the proper channels to acquire the property. Can someone explain that process? I believe it is suggested to run a title search prior to buying the tax lien certificate. What if the house/property has a mortgage lien on it as well? How does all that work? What percentage of the time do individuals pay their taxes in the 1 year period? If I know that the individual who owned the house has passed away, is that a better tax lien to buy (or not)? Please help a first timer who is just starting to learn about tax lien certificates and has a bit of interest. Thanks!

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Ned CareyPro Member
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Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
2y
@Mia Gregory I cant speak specifically to Missouri law. Tax sales vary tremendously by state.

However in general if you complete a tax lien foreclosure you wipe out any other liens and ownership interest against the property. I'm sure you heard how you can buy houses "for pennies on the dollar" just pay the taxes and the house can be yours. the reality is while that is possible the competition dosesn't allow it to happen. Tax sale auctions can be very competitive and there is risk involved.

Nationally it is said that about 95% of the property owners will redeem and you only get the interest. But the 5% that go to foreclosure are often homes in very poor condition or sometimes worthless strips of vacant land.

I never understand why people say you need to do a title searh first. If you foreclose the attorney will do a title search and serve all parties that have an interest. Tax sale cleans up the title by removing all the clouds and junk attached.

Now knowing that the owner is dead or some other factor like the property is boarded up, may increase your chance of getting the property. But you never know, the estate or heirs will have to be served and they may redeem.

I suggest you spend some time to learn the rules in your state/county. Often the county website will have good information about heir tax sales and the process.

I have done well with tax sale investing but like I said in the beginning the laws vary tremendously. You need to know how the laws in your state. good luck
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