Today, answering your question, “How do property tax auctions work?”

I’m Ted Thomas, and I’ve been involved in the tax deed and tax lien business for over 30 years.

After a long career in real estate, watching the markets continuously change with the economy, and the real estate financing cycles, I’ve found a business category that is stable.

Once you get educated and learn the rules, it’s close to recession-proof. I’ll share the fundamentals of the business of tax lien and tax deed auctions with you.

Want to learn how to make massive profits in real estate? Would you like to buy mortgage-free homes for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then you don’t want to miss this FREE Mini Course.

Large vs Small Property Tax Auctions

Property tax auctions are a hugely profitable business, and there are over 5,000 scheduled auctions annually across the United States.

Large-population counties may have multiple auctions each year with hundreds of properties. Small population counties will also have auctions; however, the properties will number a few dozen.

Georgia Property Tax Auctions

For example, in the state of Georgia, individual counties schedule auctions monthly. If the county does not have enough properties to warrant an auction, the county just cancels that particular month.

Georgia has 159 counties, and the state legislature authorizes each of the counties to make local rules to fit their needs.

Texas Property Tax Auctions

Texas is another large state with over 254 counties. Many are rural with only a few auction properties.

The state legislature authorizes each county to conduct their own delinquent property auctions which take place on the first Tuesday of each month.

Property Tax Auctions – Delinquent Property Tax

How Property Tax Auctions Work 1In all states, the fundamentals of auctions have been in place for decades. Local counties coordinate with the state to collect delinquent back taxes.

The rules for the auction will be on the county website and the state website.

Keep in mind, the county is attempting to collect delinquent property tax. This is not a sales tax or an income tax. The county expects to receive a fixed payment from each property owner that was assessed by the official tax collector.

The problem for the county is many property owners do not pay on time, and others don’t pay at all.

Property Tax Auctions – Failure to Pay Property Tax

If property owners fail to pay property taxes, the treasurer will take action and send multiple notices of default the property owner, which is due process of law.

If the owner cannot pay, the treasurer will confiscate the property, evict the owner, and proceed to auction the property to the highest bidder. This is called a tax defaulted property auction.

First, the property is added to a tax delinquent properties for sale list.

So if you’re looking to do a property tax lien search and wondering, “How do I find tax delinquent properties in my area?” the list is published on the county website and in local newspapers, where the public auction is announced.

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How Property Tax Auctions Work 2

Property Tax Auctions – Mortgages, Liens and Encumbrances

What I’m about to tell you next is going to surprise and delight you.

At property tax auctions, for tax deeds or tax liens, the county will extinguish the mortgage or deed of trust loan documents that are attached to the property. Those loans will be removed from the property files.

Mortgage holders and bankers are protected by due process of law. The county does not tear up the bank’s mortgage. They simply delete it from the property records. The person who signed for the mortgage is still responsible for it, but not the auction buyer.

Most property in the United States will have a mortgage loan prior to the sale. That loan is considered an encumbrance against the property, so it will be removed when the auction takes place. Also, many other liens, including judgements, will be deleted from the property files.

This makes the auction property an even bigger bargain. Many property owners dream about property with no mortgage!

60%, 70% and 80% Discounts at Property Tax Auctions

The treasurer may sell auction properties for discounts of 60%, 70%, 80% or more below the tax assessed value.

Pricing may start as low as the delinquent back taxes and a few interest fees.

This is not a Ted Thomas rule. The law has been passed by the legislature of every state and ratified by the county supervisors or county commissioners in every county.

Imagine purchasing a property for 10, 20, or 30 cents on the dollar and getting it without a mortgage! This happens every day at property tax auctions.

How Property Tax Auctions Work 3

A Business of Abundance

Getting back to the auction process, the county may have dozens or even hundreds of properties to sell. In the large population counties, it could even be thousands.

For example, in Harris County, Texas, 5-6 million people expect 100 – 200 properties to go up for auction every month.

Compare that with Los Angeles County conducting one tax sale annually with 1,000 to 2,000 properties.

My point is, this is a big business of abundance! There’s enough for everyone.


We hope you enjoyed Ted’s lesson, “How Property Tax Auctions Work”

You can purchase mortgage-free real estate for amazing discounts at tax defaulted property auctions, and with profit margins like that your cash flow potential is massive!

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.

How Property Tax Auctions Work 4You can learn how to mitigate the risks of buying tax deed properties and reap the huge rewards! 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!

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