I’m Ted Thomas, and for the past 30 years, I’ve been involved in the tax lien certificate and tax deed business. Tax liens and tax deeds are completely different. They each are unique and today we’ll be discussing tax deeds.
Before I go further, I am not an attorney or real estate broker. I’m an average person who is an investor in tax liens and tax deeds, and I’m an author and a publisher so the information that you’re receiving is from a practitioner and guide.
Today I’ll be answering your questions about the Broward County tax deed auction, and the topics I’m going to cover are:
- Broward County Tax Deed Sales Are Competitive
- Step 1: Broward County Sells a Tax Lien Certificate
- Florida Has 2 Tax Sale Auctions
- Step 2: Broward County Has a Tax Deed Sale
- Know the Rules Before You Bid on Tax Lien Properties
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Broward County Tax Deed Sales Are Competitive
The Broward County tax deed auction is very popular, and attendees travel from across Florida and other states to attend. My point in telling you this is that it’s very competitive. The auction has many active buyers, and they’re aggressive when it comes to pricing.
Not all counties utilize the web as well as Broward County. Their website has many features, including lists of the tax deeds and dozens of frequently asked questions to help newcomers.
The Broward county tax deed auction is not an auction for those who haven’t purchased at tax auctions before. It moves quickly, and the buyers are aggressive and move fast. None of that is negative, it’s just a place to learn and not a place to be purchasing unless you have some experience. At least that’s my take on the auction.
Step 1: Broward County Sells a Tax Lien Certificate
Let’s start with the overall picture of what is taking place. The Broward County tax sale is really an auction, and the properties they’re auctioning have defaulted on property taxes. The auctioneer is attempting to get as high a price as possible. Many of the auctions are online as well as offline. In the future, I expect most to be online.
For newcomers, here’s a brief background of what’s taking place. The Florida legislature mandates that all property owners pay property taxes. The legislature pushes the rules down and has the county board of supervisors or county commissioners do the execution and make sure everything is done correctly.
In my opinion, Florida is a benevolent state because the first auction is a tax lien certificate auction, and the owner is allowed to stay on the property even though they failed to pay property taxes.
The county treasurer will issue a tax lien certificate and conduct a tax lien certificate auction. The tax lien certificate can pay a high interest rate of up to 18%.
Anyone can attend a tax lien certificate auction, many of which will be held online. The defaulting property owner, who remains in the property, has two years to pay off the tax lien certificate and redeem their property. In the event they fail to come forward and pay the tax lien certificate, everything changes.
Florida Has 2 Tax Sale Auctions
At this point many investors become confused. The original purchaser of a tax lien certificate who has not been paid is now required to request that the county have a tax deed auction. This is a second auction.
Before I go further, understand that Florida has two auctions. The first auction is a tax lien certificate, and the second auction is a tax deed auction which transfers the property.
This Is not a complex problem, however, many investors become confused between the two different auctions. This causes many auction buyers to ask, “Does a tax deed sale eliminate liens on the property?”
If you don’t understand the system, don’t bid until you do. So here is the answer.
Tax lien certificates do not eliminate liens on properties. The tax deed auction will discharge, eliminate, and delete a mortgage or trust deed loan from the property.
Once again I am not an attorney, and I’m not giving legal advice. You should talk to an attorney or title company to get advice and make sure you’re doing the right thing.
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Step 2: Broward County Has a Tax Deed Sale
The county received the property as a result of a property owner failing to pay property taxes. At that point, they engage in a process of due diligence, letting the property owner know the property is being seized.
After the county gives due process to the owner, the treasurer of the county will confiscate the property. The county’s only interest is to rid themselves of the property and return the property to the county’s honorable tax roll.
Bidding will start at the Broward County tax deed auction at very close to the back taxes which are owed, and the starting bid could be 10 to 20 cents on the dollar of the tax assessed value. That doesn’t mean the property will sell for 10 to 20 cents on the dollar. Aggressive bidders will push the prices up.
The county will issue a treasurer’s deed or maybe a sheriff’s deed. No matter what the name on the deed happens to be, the narrative of the face of the deed will plainly say that the deed has the same effect as a quitclaim deed.
That translates to the county taking no responsibility for any defect in the title or the condition of the property. This is a serious matter.
Know the Rules Before You Bid on Tax Lien Properties
Research is the answer. There’s more to the Broward County tax deed auction than showing up and announcing your bid.
Local governments are very cautious about the information they distribute. They’re direct about advising bidders that the bidder is responsible to research the tax deed property. That can easily be done online, however, you should have boots on the ground to physically check the condition of the property.
Buyers should understand the rules, and the treasurer has the ability to change the rules at any time. It’s impossible to know the price the property will finally sell for until the gavel comes down.
Required methods of payment are listed on the county website. Each auction is unique. Some auctions will accept cash, but most prefer wire transfers. The county is not flexible. If you haven’t read and understood the rules, I suggest you do not bid. The auctioneer will follow the rules, dot the I’s, and cross the T’s. Some counties will have special rules.
For example, the Broward County tax deed auction has:
- A one-minute rule
- Allows Proxy bidding
- Accepts advance payments
I don’t have time to review all of the rules, but the Broward County website will have many. The auction buyer is required to know the rules and to follow them.
We hope you enjoyed Ted’s lesson on Broward County tax deed auctions.
To quickly review, the state legislature authorizes two unique and different auctions in Florida. The first auction is a tax lien certificate auction, and the second auction is a defaulted property tax deed auction.
The Broward County tax deed auction is a public auction announced on the county website and in the local newspaper. The highest bidder wins the property. The money from the Broward County tax deed auction will be first allocated to pay off the original tax lien certificate buyer their initial capital investment plus the high interest rate.
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Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.