Delinquent Tax Sale: Finding a Home's Value

If you're getting ready to participate in a delinquent tax sale, you are probably excited about the prospect of buying a home for a fraction of its true market value. It is entirely possible that this scenario will unfold. But it is just as possible that you will buy a home you really didn't want for a lot closer to market value than you thought. How will you know if you don't actually know the market value before you start bidding? This sounds like common sense, but you would be surprised at how many bidders find themselves purchasing houses without the slightest idea of how much they are worth. This is a big mistake. Here's how you can find the value of a home so you don't make a similar one.

Market Trends
Unless you intend to chop it up and sell it for the materials, a house doesn't really have any intrinsic value. As with anything, it is only worth what people are willing to pay for it. To determine the value of any particular home, you're going to have to look first at what homes are going for in the area at the time. If houses are routinely selling for far below their appraised values, you have little reason to believe that you'll get full value for yours, either. This is, of course, one of the reasons why buying through a delinquent tax sale can be such a good idea. Even if you can't sell for the price you want, you still stand a good chance of making a profit.

Appraisal
Of course, the best way to determine a home's value is to have it professionally appraised. While this can be done to a home you don't own, you aren't going to get a fully accurate assessment without full access to the house. Which, unfortunately, you probably won't have prior to a delinquent tax sale. Still, you can get fairly close by using a professional who can make judgments with the information at hand. They may not be willing to go on record with an appraisal, but even a good real estate agent will probably be able to quote you a price that will be in the ballpark.

Condition
The price of a house in disrepair, with paint flaking off the siding, a gutter coming loose at the bolts, and a yard that looks like a haven for dinosaurs is going to be considerably lower than one where everything is beautiful and in order. This is true even if they are identical houses in every structural way. If you want to make real money after a delinquent tax sale, consider buying a house in aesthetic disrepair, fixing it up, and flipping it for a good price.