Tax sales happen daily when homeowners or taxpayers fail to pay their taxes, even after various reminders and waivers. They are an ideal opportunity to purchase properties at a discount. However, like any other property purchase, there are several steps to follow.
First-time tax sale buyers often fall victim to applicable charges and other risks that were previously unknown to them before settling for a tax sale.
Attending a tax sales auction is among the greatest opportunities many homebuyers and real estate investors desire. You’re now seven pieces away from being fully prepared for an upcoming tax sale auction and becoming the winner. You can always get a real estate expert or financial advisor to walk you through the process for more effective outcomes.
Let’s outline different ways buyers can prepare to stay safe for a tax sale auction.
Step #1: Research the Most Recent Tax Sales
You should dig deeper for the most recent offers if you’re searching for tax sale auctions in a specific county. When you come across a tax sale auction that was listed nearly six months ago or advertised more than once without success, you should let it go, no matter how attractive the deal appears.
Maybe the property isn’t as good as it appears, so it hasn’t won a buyer yet. Most recent tax sale auctions are sometimes listed directly on different property websites, social media pages, the county’s website, or physically at the county offices. Research further to know what properties are offered via the tax sale auctions from different areas.
Step #2: Research on a Single Property
After a comprehensive study into different properties awaiting a tax sale auction, you will settle for your favourite. You shouldn’t just settle blindly but research the property to know what it offers before deciding. Some key points to research include the property’s history, age, architectural design, and maybe how many owners have been there before you.
After thorough research, create a summary list and evaluate if you still find it as attractive as before. You can get a real estate agent to research the property on your behalf as they are more qualified for the job and deliver more effective outcomes.
Step #3: Set a Budget
Another way of preparing for a tax sale auction is determining how much money you wish to spend at the event. A budget straightens your financial decisions by reducing overspending or bidding on homes beyond your strength.
You can start as early as immediately after settling for a particular property to avoid impulse budgeting and allow yourself some time to make changes to the budget ahead of the auction. You can engage a financial advisor during the budget-making process for more practical results.
Step #4: Inspect the Property Physically
You must set your eyes on your preferred property before the auction date. Even better, you can view more than one property to find out if your best is still the best before your eyes. Property viewing allows potential buyers to identify loopholes in the property, such as code violations, structural issues, and anything else they might find displeasing.
Auctioneers or county agents usually set and publicize an appointment with various potential buyers (sometimes in groups) to view the property. Ensure you adhere to the set stipulated date, as most county officers barely allow a second-time viewing for tax sale properties.
Step #5: Gather Finances
After viewing, auctioneers or county agents usually allow buyers some time before settling on the main auction date. This is when you should re-evaluate your decisions to find out if you still love the property. After settling for a particular property, you can now move to gather the finances as most tax sales need the payment in full or at least a ¾ on the auction day.
You can pull out your savings, ask for help from friends and family, or acquire a loan from a financial institution. As you risk your hard-earned finances for this property, ensure it meets your heart’s desires.
Step #6: Understand the Auction Process
Tax sales auctions differ regarding rules from one auctioneer or county government to another. Some governments will allow online bidding, while others need their bidders to present themselves physically for the procedure.
Besides how to bid, every tax sale auction has unique rules regarding the entire procedure and the property under discussion. Ensure you fully understand the rules and regulations before the auction begins, and don’t be afraid to ask for clarification on what appears complex.
Step #7: Prepare to Win the Auction
As you prepare for a forthcoming tax sale auction, you should maintain a winning mentality and nothing less- positivity attracts everything great. Ask yourself, ‘What if I win the auction?’ then provide all the possible answers.
You should fully understand how a tax sale property’s title is transferred before you go into the auction to eliminate the risks of limited knowledge syndrome. Additionally, grasp all the existing legal requirements and rights concerning new owners of tax sale properties. That way, you’re more than ready to partake in that tax sale auction and hopefully emerge victorious.