- 1). Look for public notices of city and county tax sales, also called tax lien sales, which are published in local newspapers. In addition, many municipalities publish auction dates on their websites as well.
- 2). Examine the list of delinquent properties available for sale. A list of addresses for each property will be published in the same location as the original auction notice. If the addresses are not listed, contact the local tax commissioner's office to obtain the list.
- 3). Identify homes in your area that are of interest. Drive by and examine the house. Unoccupied homes usually will be locked. so you will only be able to view the interior through windows. Look at the outside of the property and the neighboring homes to determine if you think the property is worth buying. In some cases, the home will be occupied, so avoid looking in the windows in this case.
- 4). Attend the sales tax auction on the appropriate date and bid on the house that you wish to purchase. The auctions start at various prices, which go up as people bid.
- 5). Sign the paperwork and pay the cash price, if you are the winning bidder on a home. Most municipalities allow you a certain time period--usually 48 hours--to pay either with cash or a certified cashier's check.
- 6). Prepare to wait. States usually give a set amount of time for the original owner time to pay outstanding taxes. This period varies but will run anywhere from several months to one year.
- 7). Hire a lawyer at the end of the waiting period and file a lawsuit against the owner to obtain the title to the home. If, however, the owner paid the taxes, you can collect your original money and interest on your money. Interest on refunded sales tax purchases typically runs between 10 percent and 12 percent but can run as high as 18 percent, according to Bankrate.
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