I’m Ted Thomas, and today I’m answering your question, “Can I sell my house with a tax lien?” and the topics I’m going to cover are:
- Selling a House With a Lien on It
- Buying a House With a Tax Lien
- Tax Lien Certificates Benefit Homeowners and Investors
- Tax Lien Certificates as an Investment
- Acquiring Property by Paying Back Taxes
I’m going to answer your question right away. You can always sell your house, and I’ll tell you the details.
I’m also going to explain how the tax lien process works and show you how to make some money because I know you want to learn how to do that.
When I’m done you’ll understand the process from all perspectives, the homeowner’s, the county’s, and the tax lien investor’s.
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Selling a House With a Lien on It
There’s a lot of confusion about tax liens, and people ask me, “Can I sell my house with a tax lien on it?”
The answer is, “Yes.” However, when you’re selling property with delinquent taxes, you’re not going to be able to grab all the money and go. Part of the proceeds will go to pay that tax lien.
No property gets transferred in any county until all the taxes are paid. Every property has to have a transfer tax paid of some kind. When that is activated, they’re going to realize that the tax lien on the property hasn’t been paid.
You can’t walk away from a tax lien if you own property. The transfer won’t take place. You’re not going to get away without paying a tax lien certificate. If that’s bad news for you, I’m sorry. However, the good news is that you can sell your house.
Buying a House With a Tax Lien
If you’re a tax lien investor asking that question, it’s good news for you. Now you realize how secure a tax lien certificate is. Your money is always going to be protected.
If a tax lien is issued on property, the government will get their money. So, if you buy the government’s tax lien certificate, you’re going to get paid. That’s a promise the government actually makes.
They say, “Buy the tax lien so that we have some money to take care of government employees. If you do that, we’ll pay you a high interest rate and make sure that your money is safe and secure.”
When you buy a tax lien certificate, the property can’t be sold without you getting paid.
You will either get paid on your tax lien certificate, or you’ll get the actual property. If you get the property, now you’ll have purchased the property for 2% or 3% of its value.
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Tax Lien Certificates Benefit Homeowners and Investors
What is a tax lien certificate? A tax lien certificate is the result of a property owner not paying property tax and the county allowing someone else to pay the tax on the property owner’s behalf in exchange for receiving all of their capital back plus interest.
Instead of outright seizing the property, the county will issue a tax lien certificate. This allows the tax delinquent homeowner to remain on the property and gives the homeowner more time to pay off the tax lien plus the penalties.
The amount of time depends on the state where the property is located and typically ranges from 6 months to 3 years.
95% to 97% of homeowners will succeed in paying off the tax lien. This is encouraging news for you if you’re a tax defaulted homeowner. It’s also good news if you’re a passive investor who only wants to collect a check.
Tax lien certificates are a win-win for both homeowners and investors. The county wins as well since they receive the revenue needed to pay county employees and maintain local infrastructure.
Tax Lien Certificates as an Investment
In half of the states, they sell tax liens.
You can find lists of those in the newspaper or online, or you can find them at the county. When doing a property tax lien search, you’ll find that there will be thousands of tax certificates available depending upon the state and the county. Anybody can buy one.
You can buy a tax lien certificate for $50, $500, $5,000 or $50,000. You’re not getting a property. You’re buying a certificate to make money.
Tax lien certificates are very popular, especially with older people because a tax certificate is a predictable, certain and secure passive investment.
It’s predictable because you know they’re going to have the auctions. It’s certain because you know what the rate of return (ROR) is going to be, and it’s secure because it’s secured by the property.
Acquiring Property by Paying Back Taxes
Now, what do I mean by secured by the property? If the property owner doesn’t pay the tax certificate, then you’re going to be awarded the property.
You will own the property, and you only paid the back taxes to get it.
Additionally, the mortgage is always wiped out at a tax lien or tax deed auction. This is a nice opportunity for you.
We hope you enjoyed Ted’s lesson, “Can I Sell My House With a Tax Lien?”
If you’re a homeowner with unpaid property taxes, the good news is that, yes, you can sell your house. However, you can’t walk away from the tax lien. You will be required to use some of the proceeds of the sale to pay off the lien.
More good news is that statistics show that the vast majority of homeowners are able to ultimately pay the tax lien.
If you’re an investor who purchase tax lien certificates, this is good news for you too. The government will see to it that the property owner can’t sell the property without paying you. You’ll either be paid, or you’ll get the property mortgage-free.
If you’d like to know more, Ted provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
You can learn how to reap the huge rewards from tax lien and tax defaulted property investing! Get started today by taking advantage of Ted’s Free Master Class! Act now, it costs you nothing and will give you a big head start!
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.