Originally posted by Jon Holdman:
That's very confusing. The redemption period starts after the property is sold at the sheriff's auction. At that point, the previous owner no longer owns it and cannot sell it. If the owner sells it to you at that time with a quit claim, you have given her the money for nothing. That quit claim deed is useless.
The tax lien is probably not wiped out by the foreclosure. Are you talking about a property tax lien or a IRS tax lien? These is a fairly long redemption period for IRS liens, but I've heard they rarely redeem.
If there is an owner's redemption period, you could by the redemption rights from the previous owner, then redeem the property. If you do this, you will need to be sure you know what you will have to pay to redeem. If the bank bid high (like, what they were owed), that price may be way too much.
If this did go to auction, and the bank was the winner at auction, and you "buy" the property now from the previous owner, you are buying ABSOLUTELY NOTHING. When the redemption period ends, the bank gets the property. Anything you pay the owner is meaningless and if you "sell" the property, that transaction is meaningless.
The tax lien is the least of your problems. If this property has been to auction the only thing you could buy from the previous owner is the redemption rights. If the owner is trying to sell the property, you're fixing to be screwed.
Here's how I understand it.
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In Arizona, if a property is delinquent on its taxes, the local county issues a lien against that property. Once the lien is issued, the redemption period starts. Let's say for argument's sake that the redemption period is 1 year. When the redemption period ends, the holder of the lien can start foreclosure proceedings. That's when the deed would be transferred.
What I think you're talking about is a Tax Deed. Difference between a tax lien and a tax deed is with a lien, you buy the right to the tax monies that that property generates, otherwise you can foreclose on the property (after the redemption period expires). With a tax deed, you are buying the deed straight from the county or whatever local jurisdiction.
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Does any of this sound right?
What I'm trying to do here is acquire the property during the redemption period (assuming that the tax lien is the only encumbrance on the property) find a buyer, pay off the lien, and then sell the property.
Granted, I'm not nearly as experienced as the vast majority of you here on this forum. I think I found a lucrative opportunity, but you know what they say, "If it's too good to be true, it probably is." I'm trying to figure out why the above won't work.
