I’m Ted Thomas, and I’ve been involved in tax defaulted real estate and tax lien certificates for over 30 years.
Today I’m answering your questions about the Miami tax deed auction, and the topics I’m going to cover are:
- The Miami-Dade Tax Deed Auction Is Competitive
- Tax Lien and Tax Deed Auctions in Miami
- How Tax Lien Certificates Work in Florida
- Florida’s Tax Lien Certificate Redemption Period
- Reauctioning the Property at a Tax Deed Auction
- Caveat Emptor When Buying Tax Deed Property
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The Miami-Dade Tax Deed Auction Is Competitive
As you might expect, this is a very active auction. Bidders with significant cash to invest will attend the Miami tax deed auction.
Attendees should expect aggressive bidding and be prepared, as this market has considerably high-priced properties.
Yes, some bidders will find properties for as low as 10 cents or 20 cents on the dollar, however, that will be rare. The majority of the properties at the Miami tax deed auction bring large dollar amounts, and the auction moves very quickly.
Tax Lien and Tax Deed Auctions in Miami
Florida is different from other states in that the state legislature requires two auctions of tax defaulted properties. The first auction is a tax lien certificate auction, and the second auction is a tax deed auction.
The process is a little unusual, however, the first auction is a result of taxes that have been defaulted. If you’re the successful bidder at the first auction, you have purchased a tax lien certificate. This means you will own the first lien on the property which is normally owned by the county.
The property that is auctioned at the Miami tax deed auction started as a tax lien certificate that was not paid.
How Tax Lien Certificates Work in Florida
The Florida legislature makes the rules that govern how the counties are able to conduct auctions. First, the state mandates that real estate owners must pay property tax.
If the property owner fails to pay the tax, then via due process of law, Miami-Dade will send notices of default to the property owner. The notices will then lead to a tax lien certificate auction.
In Florida, the individual or entity that purchases a tax lien certificate will invest money to purchase directly with the local county.
At a Miami tax lien certificate auction, the bidding is on the interest rate that the certificate holder will receive. The bidding starts at 18%, and the lowest bidder will be the winner.
Purchasers at the tax lien auction will receive a piece of paper titled “tax lien certificate.”
Florida’s Tax Lien Certificate Redemption Period
Nationwide, approximately half of the 3,000+ counties are tax lien certificate counties, and they allow the owner who is in default to remain on the property.
This is true of Florida as well. The property owner who is in default on a tax lien certificate may remain on the property for a full two years and pay no property tax. For clarity, in Florida after two years of delinquency, the tax lien certificate will mature.
Though this is similar to other states, the big difference is that in other states when the tax lien certificate matures, the certificate holder may take the property for foreclosure. Not so in Florida.
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Reauctioning the Property at a Tax Deed Auction
If the tax lien certificate matures without being redeemed, in other words the property owner did not pay, then the Florida legislature requires the tax lien certificate buyer to notify the county to reauction the property at a tax deed auction.
The property at the Miami tax deed auction has already been through the tax lien certificate process, and the starting bid at the Miami tax deed sale will be at least the back taxes plus the accrued interest. However, that doesn’t mean the property will sell for pennies.
The highest bidder at the Miami tax deed auction will get the property, and the tax lien certificate holder will be paid. However, if no bidder is willing to purchase at the tax deed auction, the original tax lien certificate buyer will receive a deed to the property with no mortgage or deed of trust loan.
Caveat Emptor When Buying Tax Deed Property
Properties sold at tax deed auctions qualify under the saying “buyer beware.” The purchase of the tax deed from the county does not warrant or guarantee clear title by that county.
Typically, you will receive a sheriff’s deed, however, it might be a county deed or treasurer’s deed, and more than likely, it will be a quitclaim deed.
From my experience, the deeds will have a narrative that is written on the face of the deed. The effect of that narrative is that the writing is telling you it’s a quitclaim deed; it might have a different name, but it’s a quitclaim deed.
This simply means that the county is taking no responsibility for the condition of the property and also no responsibility for defects in the title.
I’m not an attorney, advisor, or broker, so these are good questions to ask an attorney to get answers.
We hope you enjoyed Ted’s lesson, “Miami Tax Deed Auction”
Miami tax deed auctions are competitive, aggressive and fast moving, and this is a venue where big money changes hands. Properties are on the more expensive side, but there are still good deals to be found by knowledgeable investors.
A knowledgeable investor will know the rules, understand how the Miami tax deed auction process works, and know how to do property research to narrow down the list to the most profitable real estate to avoid making costly mistakes or poor purchases.
If you’d like to know more about tax delinquent property investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
Learn how to reap huge rewards from tax lien and tax deed 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.