The United States real estate market, in 2007, is awash in foreclosures. Traditional foreclosures occur after a homeowner fails, for a long enough period, to make the scheduled monthly house payment. That homeowner will be given a pre foreclosure period in which he or she can make up the delinquent payments.

Like homeowners who fail to make their mortgage payments, homeowners who fail to pay their taxes--Federal, property, or those listed in their mortgage contract--may risk tax foreclosures.

If you fail to pay your taxes in full, those to whom you owe the taxes will file a tax lien against your home. The total amount of the lien will depend on the size of your past due taxes as well as accruing interest and penalties for your failure to pay your taxes. The lien will include a date by which it must be paid in full; if the payment is not made the lien holder will start tax foreclosure proceedings.

This means that the property could eventually be sold through a tax foreclosure auction, and while the owner will lose the home, some lucky tax foreclosure auction bidder will pick it up at far less than its market value.

Plenty of real estate investors look for tax foreclosures on which to bid, because they can be purchased at such great discounts. But anyone wanting to buy tax foreclosures needs to do a lot of advance research to make sure there are no further liens attached to the properties in which they are interested. If you are new to the tax foreclosures market, you may benefit from the help of a realtor experienced in dealing with tax foreclosure properties, at least for your first few auctions.

More Tax Foreclosure Facts Tax foreclosures procedures vary from state to state and even from city to city, and while most tax foreclosures are sold through sealed auction bids, some areas may allow them to be bought privately. It is common for states and cities to have annual auctions or stipulated periods during which their tax foreclosures can be sold.

And a tax foreclosure does not always result in the sale of real estate; a buyer may simply purchase a tax lien certificate, acquiring the value of the lien. Actual tax foreclosure properties are sold at auction, and the winning bidders take full title to them.

Tax foreclosures provide exceptional opportunities for discerning buyers; but they can also mean a devastating loss for a homeowner who tried to avoid a small tax payment, saw it turn into a sizeable lien with the addition of the interest and penalties, and ended up losing a home.