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Questions About Property Tax Sales

With the economy the way it has been and the financial ups and downs of the realty world, the term property tax sales has become a hot new term. What this is, is a new homeowner or investor is looking for property to buy for a low price and the way to do this is by buying the property for its property taxes. What are the properties they are buying? The can be business real estate, houses or condominiums that are on the market due to property taxes not being paid.

Why is this different from foreclosure? Both are forced sales but a foreclosure is when some does not make a mortgage payment where the bank holds the mortgage and then decides to foreclose. When a property owner does not pay taxes on their property, there is a force or sale by the government in order to reclaim the property owner’s bad debt.

Is a short sale the same or different than the others? It is different being that the mortgage holder still owns the home, in a short sale, but the mortgage holder is trying to sell their property for less than what they owe the bank at the time. This is so they can find a new owner for the property and release the current homeowner and forgive the remainder of the current balance.

What are property taxes used for? When you here services that are “free” and the public can use these services, they really are not free, they are paid for by these property taxes. The “free” services are fire departments, police & sheriff departments, community colleges, roads, road maintenance, elementary schools, high school, sewer plants and public libraries. All of these “free” services make neighborhoods and homes worth living in and worth the selling prices.

How do they decide how much to charge for property owners for taxes? Assessment values and assigned values are given each year by the government. A part of the assessed value becomes the amount that the property owner is charged to pay each year.

How do homeowners get behind on property taxes? Some homeowners decide that when they take out their mortgage that they do not want to include their homeowners insurance and property taxes into their monthly payment. Therefore, when it is time to pay the property taxes each year, they can not come up with the large amount of money that is due and fall behind on their property taxes.

How do you sell these properties? Chances are given to property owners to clear their debts and get back on track but sometimes the property owners just can’t make the payments on their debts and the chances are null and void. Then public auctions can take place on the property. At this time investors can make bids to purchase the property or properties up for auction. The bids that start out the auction are the total amount of normally the past due taxes, penalties on the property and advertising fees for selling the property, if any, that have racked up for the sales.

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