Texas Tax Sale Newbie Questions

[Scott Pigman]

I'm trying to understand how tax sales work in Texas to see if it's something I want to pursue further. I'll appreciate corrections or confirmations on the things I think I know and answers to the things I don't.

I understand that in Texas you're bidding on the property itself, not a lien on the property. If you win the auction, you own the property, but during the redemption period of six months to two years, the former owner has the right to buy it back from you for your purchase price plus some percentage.

Questions and Concerns

What happens to the original tax bill? Is that cleared when you win the auction or do you now have to pay that on top of your winning bid?

What happens to other liens, like a mortgage?

Does the county evict the previous owners before the sale or could they still be living there? I'd expect them to not be too happy about losing their property.

What rights do you have during the redemption period? It seem that everything you might want to do during that time has a big asterisk next to it, "subject to the original owners not taking back the property."

So the upsides are that you either make a good return on your money or you end up owning the property outright. Right?

The downsides... You overpay, either because you didn't research it well or you let another bidder run your bid up. Previous owners damage the property. You have to tie up your cash until the property's redeemed or you can cash-out refinance. You're responsible for other liens? Anything else I'm missing?

Thank you,

Scott