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Some states like NM (which is a tax deed state, not tax lien) do not extinguish any previous liens off the property when sold at an auction. It is very important in these type of states that you do your due dilligance prior to purchasing any tax deeds.

As for leins I would reccomend picking up this book:

"Profit By Investing In Real Estate Tax Leins" by Larry B. loftis, Esp.

Was very helpful for me in explaining the different aspects of tax liens.

-Martin

One thing to remember if you are going to buy a lien on a unimproved lot.

Is the lot 'worthless'. (ie too narrow to build anything on, is a drainage ditch, very odd shaped with no buildable are, etc)

The county/state doesn't care about what they sell you, they simply want to collect past due taxes. Very often a owner who has a piece of property that is 'worthless' will not pay the taxes on that land as it is not worth it. This land will end up in the lein auction. If you buy this lien the owner will most likely not redeem and you will end up owning the 'worthless' property yourself, and then be responsible for the taxes etc.

There is an excellent book on the subject of tax leins and deeds called:
"Profit by Investing In Real Estate Tax Liens" By Larry B. Loftis, Esq

I found this book to be very useful and it explains how each state works, examples of what to do and what not to do, tips for the actual auctions, and tons of emamples from the author's own experience. (its actually kind of funny some of the leins he has shown in this book, mcdonalds; walt disney world; bellsouth mobility; united states postal service; and even the united states of america have had leins on them at one time or another.)

-Martin

Yeah that was good!

I pity tha fool who doesn't buy Carlton Sheets' program...

-Martin

Here are a couple quotes from the NM Department of Taxation and Revenue:

[b]Q: What type of deed does the Property Tax Division issue for property purchased at tax sales?
A:[/b] The deed that the state issues is a Quitclaim Deed. The deed conveys all of the former owner's interest in the real property as of the date of the state's lien for real property taxes arose. This deed is subject only to perfected interests in the real property existing before the date the property tax lien arose. The State of New Mexico warrants no title to property purchased at public auction sale and the deed issued by the state can be used for the basis for quieting the title.

[b]Q: If a buyer purchases a property through tax sale, are all other existing liens against that property extinguished at that time?
A:[/b] A sale properly made under the provisions of Section 7-38-67 NMSA 1978 constitutes full payment of all delinquent taxes, penalties and interest that are a lien against the property at the time of sale, and the sale extinguishes this lien. No other liens are extinguished.

I'm having a hard time figuring out if r2d246 was being sarcastic.....

-Martin

So if the county issues me a quit claim deed and it was worth the difference of the value of the house and the remainder of the mortgage. and then the original 'owner' defaulted on the mortgage payment and the bank foreclosed on the property, would the bank have to pay me the difference of value of the property vs what was owed on the mortgage to acquire the property?

I highly doubt this scenario will occur, but I like to be sure of all possibilities.

Thanks!

-Martin

Makes Sense. Thanks!

The reason I was asking is in regards to NM tax deed sales. When a tax deed is purchased the county will issue the winning bidder a quit claim deed to the property, however no previous liens (except the tax lien) are extinguished. So if there was a mortgage on the property and the county issued me a quit claim deed for the prevoius owners rights would the county be issuing a worthless quit claim?

How about a trade for the capitol building? I will give you a quitclaim for the brooklyn bridge? :lol:

-Martin

Say John Doe purchased a home and took out a mortgage on it. Later, before finishing payment on the mortgage, transfered his interest in the property via quit claim deed to Joe Blow.

Would the mortgage follow the interest to the property and become Joe Blow's responsibility, or would John Doe remain responsible for the mortgage but have no interest in the property?

-Martin

Goodness, That was much more than I was expecting.

I know you can do a "Pro Se Quiet Title action" which mean you file it yourself and act as your own attorney. At 4k a pop I am leaning more towards learning the ins and outs of it myself.

-Martin

Anyone know how much RE Attorneys charge to do a Quiet Title Action?

Is it feesable to do one yourself?

Any information on Quiet Title Actions is appreciated!

-Martin