Tax Lien Foreclosures: A New Way to Buy Repo Property

Tax lien foreclosures are properties that are being sold through special sales and auctions as a result of tax liens being held against properties by federal or state authorities. Tax lien foreclosures differ from real estate bank forclosures, because they do not involve defaults on a mortgage loan.

In most cases, tax liens forclosures occur when a homeowner is behind on income taxes, or failed to report some part of their earnings and is facing foreclosure as a resultant penalty to collect the debt in the case of bankruptcy. However, tax forclosures can also happen as the result of delinquent property taxes, or any other kind of taxes for which the homeowner’s property can be used as collateral.

Since the entity in charge of the repossession in this case is a governmental authority and not a bank or private sector lender, the procedures for finding and buying can be quite different from an ordinary foreclosure. Oftentimes these properties may be sold in similar ways, either through auctions or silent bidding procedures, but the sources for finding them can be harder to come by. But they can offer some incredible deals, since in many cases the amount the government needs to collect to cover the tax debt is far below the actual value of the property or its mortgage.

Using a Multiple Listings Service is often the best way to locate tax lien foreclosures. Some, like BankForeclosuresSale.com, have very effective tools for locating tax lien foreclosures and real estate bank foreclosures, so you can compare prices. Tax lien foreclosures are certainly worth looking into if you’re looking for a new way to fins extra discounts.

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