Wholesale Property Beginning a Tax Lien Certificate Foreclosure

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Wholesale Property Beginning a Tax Lien Certificate Foreclosure

Jon DeCamp
Middletown, NJ · Member since 2015 · 32 posts · 3 votes

The following are questions I have in relation to potentially putting a contract on a property to wholesale a deal:

I came across a property the owners of which received a Summons & Complaint for the purpose of foreclosing on a Tax Sale Certificate and they must respond within 35 days of the filed Complaint. Some questions:

1) Foreclosing for a tax sale certificate is different than a lender foreclosing, correct? My understanding is that the lien for a tax sale certificate specifically involves property taxes or water or sewer taxes - or any combination thereof as compared to defaulting on payments to a lender, correct?

2) Once the Complaint is filed (which it has been), is that considered being in pre-foreclosure proceedings or is it considered foreclosure proceedings? (and I'm not sure of the difference, actually). I'm wondering when the legal proceeding of foreclosure will prevent a wholesale deal from happening at all, if at all.

3) Can the owner of the house that has received the Complaint sell their house to a cash buyer - the main question ie. is the Complaint a good indication of a potentially motivated seller, the kind who wholesalers love to find, or is it too late at that point to strike a deal?

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    9y

    @Jon DeCamp

    1) Yes

    2) It is in foreclosure. We're talking about semantics here. Some terms like Pre-Foreclosure don't have exact specific meanings. In a mortgage foreclosure, once a foreclosure has been filed it could still be considered "Pre-foreclosure" until the foreclosure auction on the courthouse steps. In a tax foreclosure, the auction has already happens and there is no specific deadline for the case. It is over when the tax sale holder has met the requirements of foreclosure and a judge approves it. Once the tax holder has met their requirements, then a judge can rule at any time. It could be days it could be months. In MD and I suspect NJ a property owner can redeem and pay the taxes at any  time until the judge give a judgement for foreclosure. 

    3) Normally yes. A property owner can pay off the taxes or sell his or her house until the foreclosure is over. I heard that in NJ they have a law that you cannot approach an owner in tax sale to buy their house.  I only heard this once so you would need to confirm that. It certainly seems like an absurd position for the state to take and probably unconstitutional. However there are lots of stupid laws out there.

    If NJ is anything like MD the owner typically has much longer than 35 days. However nothing can happen until that 35 days passes.

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