Are you wondering how to claim tax sale overages? Does the county owe you money?
Today I’ll answer an all too common question about how to claim tax sale overages. Very few people know about this. Let me tell you how you can claim this money!
The easy answer is surprisingly simple. Everything regarding tax liens and tax deeds and tax overages is covered at the county records, usually called the public records.
I’m Ted Thomas, and I’ve been involved in tax liens and tax deeds for approximately 30 years. In the past 25 years, I’ve become a mentor and a coach as well as an investor. I’m not an attorney, broker or CPA, just a prepared investor, author, publisher, entrepreneur and educator.
Table of Contents:
- Where to Find Tax Sales Info
- What Are Tax Sale Overages?
- Tax Delinquent Property Auctions
- Calculating Tax Sale Overages
- Claiming Tax Sale Overages
- How to Start a Tax Overages Business
- Can You Get a Tax Overage List?
- Conclusion
Where to Find Tax Sales Info
If you want to know how to claim tax sale overages, first you need to know how to navigate the county records.
In years past, at my 3-day workshops, which are live events with usually 100-200 attendees, we’d split the class in half in the AM and half in the PM. Each half of the class would attend a formal tour of the county records.
This tour is actually a very important part of this training. At the 3-day auction preparation workshops, everyone is amazed and delighted by what they learn. Today’s classes prefer to study online.
The public records are real-time information, and the research can be accomplished by anyone. The laws of the individual states, the processes that affect the auction, and the information you need is always at the public records.
What Are Tax Sale Overages?
Before we talk about how to claim tax sale overages, let’s define what the overages are. To start with, most tax defaulted auctions will have overages when properties are sold to individuals and the bid amount is more than the back taxes. The difference is the overage, and I’ll be giving you an example of this.
It’s very possible and profitable to make money, big money, with tax sale overages, and I’m about to tell you what you need.
Forget about all the hype. To be successful, you need to spend time and effort on in-depth research at the county records. There is no easy money I can assure you.
To get started, get the list of the property owners who forfeited their property for nonpayment of taxes because the property may have sold for an amount over the delinquent taxes.
Tax Delinquent Property Auctions
What happened? The property owner failed to pay the required property taxes, and the state legislature in all states requires property owners to pay their fair share of the budgeted property tax.
The legislature authorizes the county board of supervisors or county commissioners at the local office to assess taxes, levy taxes, and collect taxes.
When the property tax is unpaid, the treasurer is authorized to seize the real estate for nonpayment. Thereafter, the county announces a tax defaulted property auction online at the county website and in the local newspaper. Anyone may attend a tax delinquent property auction.
Calculating Tax Sale Overages
How do you calculate tax overages?
For example, the property’s assessed value is $75,000. The bidding at the auction starts at the amount of the back taxes which is $5,000. However, aggressive bidders push up the auction sales price to $45,000.
All $45,000 is paid to the treasurer at the auction, yet the unpaid taxes were $5,000. Therefore, the overage is $40,000.
So, the county sold the property at auction. They received $45,000, which more than paid the taxes, and a $40,000 overage remains with the treasurer.
So let’s talk about how to claim tax sale overages and who has the right to claim an overage.
Claiming Tax Sale Overages
The county’s responsibility is to seize the property, resell it to the highest bidder, and pay off the delinquent taxes. The funds received in excess of the delinquent taxes belong to the property owner.
If the property owner fails to come forward to collect the $40,000 I gave in my example, it remains with the county.
It’s been my experience that the county will make little effort to notify the delinquent property owner of the unclaimed funds.
The county will hold the funds, and if no one makes a claim, the money will escheat to the state. That means it’s confiscated. It’s gone.
To claim the tax sale overage, the property owner must contact the county and follow the county’s process for claiming an overage.
How to Start a Tax Overages Business
Perhaps you want to know how to claim tax sale overages because you’re interested in going into the tax sale surplus recovery business.
It’s possible for the educated investor to locate the delinquent taxpayer or taxpayer’s estate about making a claim. Otherwise, this money will be forfeited to the county and state.
In most instances, the property owner is unaware that these funds are available.
Is tax overages a good business? Shrewd and savvy investors figure it out by following the rules on how to communicate with the county, so as to not break any laws, and how to be a matchmaker finder to help the estate or the property owner who has probably disappeared.
The beneficiaries of this process are all concerned, meaning the property owner and the finder will share the overage from the property owner’s estate since the finder expects a percentage of the recovery.
Can You Get a Tax Overage List?
Is there a county tax sale overage list? The county will have a list of all auction sales, and it will easily determine the overages on each property.
It’s not a nightmare. It’s all in the records which are public.
The statutes aren’t easy at first. The biggest challenge is you must know and follow all the rules.
County employees are not your employees, however, they can give you limited information. A few may be resentful, but the majority will provide you with the information if you’ve read the rules and understand how to request the info.
Conclusion
We hope you enjoyed Ted’s lesson, “How to Claim Tax Sale Overages“
What are tax sale overages? When a county seizes real estate for unpaid property taxes, the property is sold at a public auction with the bidding starting around the amount of the delinquent back taxes. If the bidding is aggressive, the property could sell for more than the amount of the back property taxes that were owed, and that additional amount is an overage.
Who has rights to the overage? The answer is the property owner who lost the property.
The property owner may not know this, and county officials don’t always go out of their way to notify the property owner. They have no incentive to do so because if the owner doesn’t claim the funds, they escheat to the county.
Here’s how to claim tax sale overages, the property owner must contact the county about claiming the overage and follow the county’s process for claiming it.
Some investors have made a business out of notifying property owners of the tax sale overage amounts they are owed in exchange for a finder’s fee.
All the information is in the public records, so overages can be found with some research. However, it is important to be aware of the statutes and follow the rules.
If you’d like to learn all the ins and outs of tax delinquent property investing, there’s no one more qualified to teach you than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property.
Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops & web classes, and personal coaching.
Get started today at no cost with this FREE Gift from Ted which reveals the incredible opportunities available in tax defaulted real estate and how you can make life-changing profits!
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.
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