In this interview, Ted explains how Pennsylvania tax deed sales work, and makes the complex process in Pennsylvania easy to understand.
You may watch the video above, or if you prefer, read the transcript below.
The topics to be covered in “Pennsylvania Tax Deed Sales: What You Should Know” are:
- Does Pennsylvania Sell Tax Liens or Tax Deeds?
- How Does a Tax Sale Work in Pennsylvania?
- Getting a Tax Sale Properties List
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Does Pennsylvania Sell Tax Liens or Tax Deeds?
Pennsylvania is a tax deed state, and the process for Pennsylvania tax deed sales is a little more complicated.
As in all tax deed states, the local government seizes real estate for delinquent property taxes in Pennsylvania and then sells the property at a tax defaulted auction to the highest bidder in order to recoup the unpaid property taxes and other associated costs.
There is no redemption period in Pennsylvania. When you purchase real estate at Pennsylvania tax deed sales, you own it.
So what is it that makes Pennsylvania tax deed sales more complex?
How Does a Tax Sale Work in Pennsylvania?
There are three main types of Pennsylvania tax deed sales: Upset Sales, Judicial Sales, and Repository Sales.
Upset Sales are the first type of tax deed sale, and these auctions are held at the county level. All of the liens and judgments will still be attached to the property at the Upset Sale. If you don’t want to pay for everything that’s owed on the property, then you would want to avoid buying at this tax sale.
Judicial Sales are the second type of tax deed sale, also held at the county level. At this auction, the judge removes liens and judgments from the property, including deeds of trust or mortgages. Not all of the liens will be removed. For instance, the property tax lien will certainly remain. However, most encumbrances will be removed, and this is where tax deed investors want to buy.
Repository Sales are the third type of county tax deed sale. Leftover properties that didn’t sell at the Judicial Sale are placed on a separate list to be sold at a Repository Sale. Since the treasurer wants to be rid of the properties, it’s possible to get excellent discounts at a Repository Sale.
Getting a Tax Sale Properties List
To get a list of properties that are up for auction at Pennsylvania tax deed sales, you can visit the county’s website, or contact them directly. Lists of tax delinquent properties for sale can also be found in the local newspaper or through a public notice.
Pennsylvania has 67 counties with each county holding its own tax deed sales. It’s important to note that these sales happen frequently. Lists of properties available for purchase change regularly, so it’s best to check regularly to get the most recent information.
Pennsylvania tax deed sales provide an opportunity for individuals to purchase properties at a discounted price. It’s important to understand the 3 different types of sales, the process, and how to get a property list. Also, be sure to do your due diligence and research property before purchasing it.
If you want to learn more about tax defaulted real estate, view more of Ted’s free videos.
Ted is the authority on the subject of tax lien and tax deed investing and has been teaching students how to buy and sell bargain real estate for over 25 years.
If you want to have a free auction list of tax defaulted properties that are currently for sale, go to TedThomas.com/freegift. See the great deals for yourself.
Read the Transcript
PA Tax Deed Sales
Randy: We’re back again with Ted Thomas, and Ted, of course, is America’s tax lien and tax deed authority. Ted, we’ve been talking about tax liens, tax deeds, or both in different states, and we are now traveling to Pennsylvania.
Randy (cont’d): We want to talk about Pennsylvania tax deed sales. Is Pennsylvania a good state for folks to shop in for tax deed sales?
Ted: Oh, yeah. In Pennsylvania, they have a complex process. However, if the people don’t pay property taxes, ultimately they’re going to lose. The property would be confiscated, and the sheriff and treasurer will sell the property to the highest bidder. That’s what happens. It’s a tax deed state.
Randy: All right, a tax deed state, I asked this, because one of your viewers on your YouTube channel was asking how to buy tax liens in PA, but to be clear, Pennsylvania’s a tax deed state.
Ted: All 67 counties are going to sell tax deeds in that state. They can have all kinds of liens on other things, but properties, in other words, homes, vacant land, a farm, a small office building, if you don’t pay the taxes, there’s going to be a tax defaulted auction, and they’re going to sell the property. It’s called a tax deed sale.
Randy: Let’s talk about the auctions then. How do Pennsylvania tax deed sales work?
Ted: It’s a little complex process, and it kind of shakes people up a little bit, because there are a lot of steps that it goes through. The first thing that the county will do is have what they call an “upset sale.” I’ll give you all three of the things they do first.
Randy: That actually sounds like a very upsetting term, Ted, I mean, upset sale.
Ted: Yeah, well, it is upsetting because if you buy at the upset sale, you get all the liens on the property, all the judgments, all the people that didn’t pay child support and their wife has got a judgment on the property, you’re going to pay everything. So, don’t buy at the upset sale or you’ll be upset.
Ted (cont’d): They have a second sale, that’s a judicial sale. What does judicial mean? That means there’s going to be a judge in a court, and at a judicial sale, they’re taking the liens off the property.
Ted (cont’d): They can never take all the liens off, but they’ll take off the deed of trust or the mortgage. They’ll take off judgment liens, and so on. It will bring a lot of that debt off the property, so that’s where people want to buy. Then, there’s a final auction, and that’s called the repository sale.
Ted (cont’d): These are all auctions. You’re going to be upset if you go to the upset one. The judicial one sounds to me like the place to be, and now here’s a repository. That means it’s a leftover, nobody wanted it, but the government will still sell it to you. Is that a lot of sales in Pennsylvania, or what?
Randy: That’s a whole lot. Hey, Ted, out of curiosity, the repository then, is that a particularly good opportunity just because things have trickled down? Or is that property that’s like, “Argh!“
Ted: Well, I tell people, check those properties out because in other counties, they’ll call them forfeited lands, leftover lands, surplus lands. Every state has that, because if they have an auction and nothing sells, then what is the government going to do?
Ted (cont’d): They can’t just trash the property. It’s theirs. They’ve got to do something, so they just put it on another list. In Pennsylvania, that list is called the repository list.
Ted (cont’d):The treasurer and the state are allowed to make any deal they want on that land. Some people buy those properties for $0.05 on the dollar.
Ted (cont’d): I don’t know all the rules right now in Pennsylvania, but we can certainly get on our computer and look up the rules for a repository sale. But there are going to be all three of those. If you don’t know what you’re doing, you’d better learn how; that’s what I’m going to tell you.
Randy: Are they clearly marked that way? Is this a repository auction, or are those all mixed within one auction?
Ted: No, it would be one county, but those would be individual sales on different dates. For example, the upset sale would be first, then probably 30 or 60 days later, maybe even six months later, there’s a judicial. Then, so many months later, there would be a repository.
Ted (cont’d): In the course of the year, there could be numerous sales. If you have a state like Pennsylvania, you’ve got 67 counties. You’ve got a lot of auctions. Most people don’t even know that this is a business. Think about that. 67 counties. You never have to leave your home state.
Randy: Yeah, that’s pretty neat. Let’s say you end up with a piece of property in Pennsylvania. Is there a Pennsylvania tax sale redemption period, or boom, you own your property?
Ted: That’s what a judicial sale is all about. When that gavel comes down, that baby is sold. They don’t have redemptions in Pennsylvania.
Randy: What’s the best way of finding when Pennsylvania tax deed sales are going to be happening?
Ted: I always tell people to start out locally at the local county, and if they have townships, then townships. You’ll go there, and they have records. If you request it, they’ll give you a PA delinquent tax list of the properties that are coming up for auction.
Ted (cont’d): Now, in this case, there are three different auctions. You want to make sure which one you pick, so they’ll give you a list. They also put those in the newspaper.
Ted (cont’d): What we’ve created is a way to do that electronically. So, someone can sit at home and dial up any county in Pennsylvania, put a cursor over that county, and we’ll tell them how many properties are going to be auctioned.
Ted (cont’d): Then, if they want to, they can take classes, go right into the county records, and learn all about that property.
Randy: That sounds pretty helpful, especially in a state like Pennsylvania with a lot of confusion there in terms of what you’re buying and what kind of auction you’re getting into.
Ted: Exactly, but if they’d like to have an auction list, they can go to TedThomas.com/freegift and get a free auction list just to see what an auction list looks like.
Randy: Well, take advantage of that. TedThomas.com/freegift
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.