Your strategy of proactively identifying tax-delinquent properties and making direct offers to owners before they reach the tax deed auction can be a smart move—if done correctly. However, there are key risks and considerations you should be aware of before pursuing this approach.
Understanding the Risk of Existing Liens
When you buy a tax-delinquent property directly from the owner (before it goes to auction), you inherit all existing liens attached to the property. Unlike purchasing at a tax deed auction—where many liens are wiped out through the tax deed process—buying directly does not eliminate mortgages, code enforcement liens, utility liens, HOA liens, or other encumbrances.
Mortgages & Liens: If the property has an outstanding mortgage, the lender can still foreclose, leaving you at risk.
HOA & Code Enforcement Liens: These can stay attached to the property and become your responsibility after purchase.
IRS & Government Liens: Some liens, such as federal tax liens, may survive even after an auction.
How to Research a Property’s Title & Liens
Before making an offer, it’s critical to conduct a title search to uncover any outstanding liens or legal issues. A professional title search can reveal:
✅ Chain of Title & Ownership History
✅ Mortgages, Assignments & HOA Liens
✅ Tax Liens & Special Assessments
✅ Code Violations & Utility Liens
✅ Pending Foreclosures or Lawsuits
At PropertyOnion.com, we offer affordable pre-title searches starting at $45, helping investors like you make informed decisions before purchasing tax-delinquent properties.
Contacting Property Owners – Best Practices
When reaching out to property owners, keep in mind:
🔹 Some owners may not be aware of their tax delinquency. Approach them with empathy and offer solutions rather than just making a low offer.
🔹 Negotiation can be complex. Some owners may have multiple debts, and settling liens may require additional funds beyond just paying the taxes.
🔹 Timing is crucial. If the property is deep into the tax delinquency process, the owner may not have many options left.
Alternative Strategies to Consider
If purchasing before the auction proves too risky or complicated, you might consider:
✔ Waiting for the auction – You can bid on the property at the tax deed sale, where many liens may be cleared.
✔ Buying post-auction – Some properties don’t sell at auction and may be available as county-held properties.
✔ Partnering with an experienced investor or title expert – Having an expert on your side can help you avoid costly mistakes.
Your approach of acquiring tax-delinquent properties before the auction can be profitable if you thoroughly research each property and its liens beforehand. However, the biggest risk is unknowingly taking on financial obligations that won’t be wiped out like they would be in a tax deed sale.
Before making offers, always conduct a full title search, assess all potential liabilities, and, if necessary, consult a real estate attorney or title expert. This due diligence will help you avoid costly surprises and turn your investment strategy into a successful one.
Let us know if you need a title search or more guidance—happy investing! 🚀
