Are there "upset auctions" in AZ?

Question

Greetings everyone!

I'm considering buying a few tax liens in Maricopa and one question I have not been able to find the answer to is: what happens when the lien holder files for the foreclosure (however unlikely, it happens)? In some states, the lien holder gets the deed, in other states the deed will be issued but sold at the auction (aka "upset auction"). How does it work in Arizona? Does anyone have first-hand experience with foreclosing on liens in AZ?

Thanks!

Josh

Jerry K. · Answer

@Josh Crawford  I assume you mean real estate tax liens? I invest primarily in Arizona real estate tax liens, but not in Maricopa county.  You'll need to read the rules for the state and the county.  Maricopa has a rule or two different from the rest of the state when it comes to real estate tax liens.

However, I do believe that the person who forecloses on the lien in Arizona, does get the property if it is not redeemed.

Here are the state statutes regarding real estate tax liens

Here are some materials specifically for Maricopa county

Talking with a lawyer who specializes in AZ tax lien foreclosures is your best source of information.

Jerry K. · Answer

@Josh Crawford In other AZ counties only one person can hold a real estate tax lien on a parcel. If I'm not mistaken (and I frequently am on counties I don't invest in) in Maricopa, one person can buy the tax lien for, say 2013, and if the owner doesn't redeem and the lienholder does not pay the next year taxes either, then a second lien is sold on the property for 2014. The one who holds the oldest lien has the advantage of foreclosing earlier than subsequent lien holders. (however most redeem before foreclosure)

Plus, there is a lot less competition in other AZ counties. That means (possibly) higher interest rates.

Plus, there is a lot less competition in other AZ counties.  That means (possibly) higher interest rates.

Jerry K. · Answer

As an update to this thread. Most of the other counties in Arizona now allow multiple people to hold tax liens on a parcel. It used to be if you didn't pay the subsequent year taxes, then they put your older lien in with the next year lien and sold it to a new investor. When the new investor won, their price included your lien plus interest. So you would get paid with interest and now the new investor had your lien too. I know several lien investors who used AZ tax liens as sort of a one year CD. They would pay the taxes and if the owner did not pay off, they would not pay the sub-taxes and the county would sell their lien and the new lien too. That way the original investor was paid off after a year.

Josh Crawford · Answer

@Jerry - Thank you for the links! By the way, out of curiosity - is there a particular reason you prefer other counties over Maricopa?

Boyd McClean · Answer

You might consider joining Pre-paid Legal. They have law firms all over US that can answer your questions for a flat monthly fee.

I have a situation in Fl that I am getting advice on and I don't live in that state.

Most likley I would be in a stripped uniform behind bars if I did not have the ability to run an idea or situation by a lawyer to find out if I was heading up the wrong tree.

Josh Crawford · Answer

Thanks Boyd! The link has lots of info but they mostly talk about the non-judicial foreclosure and barely touch on the question I'm trying to clear... Have you ever had to foreclose on Arizona lien?

Boyd McClean · Answer

Try this   Foreclosure

Are there "upset auctions" in AZ?

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