Some counties use the sheriffs office as the means to sell tax-defaulted properties. When the owner of a home doesn’t pay their property taxes, it becomes in violation of the local county’s right to charge homeowners for the services that the county provides (e.g., police, fire, libraries, teachers, maintenance of county buildings). As a result, they county will exercise their right to levy a lien on the property and then the county may even confiscate the property if non-payment of taxes continues.
Now keep in mind that when a county seizes the property, the county does not actually want the property. The county wants a responsible owner to own the property and pay the property tax every year.
So then what can a county do if they confiscate a property? Well, the county is within their rights to sell the property to recoup the outstanding taxes. The county tax collector office can facilitate the auction themselves, but sometimes counties will delegate the activity to the local sheriff’s office. This is sometimes referred to as a “Sheriff’s Sale” or “Ex Officio Sheriffs Sale/Auction”. Each county may have different names, but the general principal is the same.
Here's what you need to know for sheriffs sale/auction:
Tax Trouble: When someone doesn't pay their property taxes for a while, the local government can put a lien on the property, which is like a claim to the property.
Public Auction: The Sheriff's sale is like a public sale where anyone can try to buy these properties. They usually happen in a public place like the county courthouse.
Minimum Price: The starting price for these properties is the total amount of unpaid property taxes, penalties, interest, and other costs. This is called the minimum bid.
Bidding War: People who want the property bid on it, and the one who offers the most money wins. It can get competitive.
New Owner: If you win the auction and pay the highest bid, you get a legal document called a Sheriff's deed. This means you now own the property, but there might still be other debts on it.
Redemption Chance: In some places, the old property owner has a little time after the sale to pay what they owe and get their property back. If they do, you get your money back plus some extra (e.g., interest, penalty fee)
Risks and Homework: These auctions can be tricky, so you need to research the property to know if it's a good buy. Look into the property's condition, its history, and any other problems.
Rules and Laws: The rules for these sales can be different depending on where you are. Make sure you follow the rules and get legal advice if you need it.
So, Sheriff's sales can be a way to buy properties at lower prices, but you have to do your homework and be aware of the rules and risks. It's a bit like a competitive auction for houses with tax problems.