- Real Estate
Tips on Purchasing a Tax Defaulted Property
Thinking of purchasing a foreclosed property?
Why not buy a tax defaulted property? In some cases you could get a better deal and against less competition, directly from the county. Perfect example, in a 2011 tax sale in Orange County, California an Irvine property sold for $243,000. Properties in this neighborhood range from $400,000 to $500,000 in today’s market, what a deal.
Overview of Tax Sales in California
California has adopted a tax deed auction process to collect delinquent property taxes. California holds Tax Sales all different time of the year varying per County. You must register online, in person or by mail to participate in the Tax auctions. Registration can be made all the way up to one to two days prior to the auction, but its best to register early, most of the time a deposit will be required. All properties will have a minimum bid, which has been determined
by the county prior to the tax sale. The starting bid will include delinquent taxes, all penalties, and admin cost. , San Francisco County, and San Diego County hold some of the largest auctions in the state and Los Angeles County is one of the most popular auctions. Orange County
For detailed information on a property the bidder will have to do their own due diligence, one way of doing this is to contact a local title company, they are available and able to assist with this type of records and parcel data research, sometimes for a fee. The bidder will need to check for easements, covenants conditions and restrictions, any IRS tax liens and if the property has a structure or is vacant land. All other liens including, senior and junior deeds of trust and county tax liens will be eliminated with Tax Sale, so the winning bidder will receive a free and clear property.
The winning bidder will receive the deed to the property once they have paid for in full, most auctions will require the winning bidder to pay the entire amount once they have won the bid. Some counties will have restrictions on when you can build on the property you have won.
Another thing to remember is when can the winning bidder start improvements on the property, “There is a one (1) year period of time, after the date the tax deed is executed that improvements can be commenced, pursuant to Section 3725 of the California Revenue and Taxation Code”
Breakdown of the Tax Sale
Type of Tax Sale: You will receive a Tax Deed.
Contact for the Sale: You can contact the Tax collector or treasurer’s office for the County.
Bid Procedure: The highest bid will win.
Redemption Period: There is NO redemption period for the previous owner, once the property is sold through auction and the deed is recorded the previous owner cannot redeem.
For your convenience, I have posted a list of all the Counties in California with their website for their tax sale information. For more information regarding a specific public auction sale, contact the county tax collector's office.
Contra Costa County
Del Norte County
El Dorado County
Los Angeles County
San Benito County
San Bernardino County
San Diego County
San Joaquin County
San Luis Obispo County
San Mateo County
Santa Barbara County
Santa Clara County
Santa Cruz County
San Francisco County
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