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Save Money With Tax Deed Sales

A great way to purchase real estate at bargain basement prices is with tax deed sales. These properties are different from foreclosures and short sales. Like foreclosures and short sales, these are ho...

A great way to purchase real estate at bargain basement prices is with tax deed sales. These properties are different from foreclosures and short sales. Like foreclosures and short sales, these are houses whose owners have, for whatever reason, been hit with hard times. What may have been financially painful for the former homeowner can be profitable for the investor with ready cash or financial backing. The homeowner may even be relieved to no longer have possession of a financial burden he or she couldn't afford.

A foreclosure occurs when a homeowner has stopped paying his or her monthly mortgage payments. The holder of the note, usually a bank, will call in the loan and take the property back in order to put it back on the market. A short sale is when an owner can't afford the house anymore but is upside down on the mortgage. Being upside down on one's mortgage means that more money is owed on the loan's balance than the property is currently appraised for. This has been happening more frequently lately because of the decline of property values and the fact that many lending companies loaned 100 percent of the values with no money down. Lenders have since realized that this was a big mistake and have tightened up rules and regulations. Tax deed sales occur for a different reason and that is when a homeowner has failed to pay their property taxes. When this has happened, the government has stepped in to recoup the bad debt.

Property taxes are based on a percentage of the assessed realty value. These funds cover all public services, such as emergency personal like the fire department, sheriff's office, the public library, road maintenance crews, parks and public schools and colleges. All citizens are responsible for pitching in their fair share so that neighborhoods and communities are livable and protected by these amenities.

When real estate and property taxes become delinquent, the government will do everything in their power to notify the owner in order to collect. Sometimes, for whatever reason, a person just cannot or chooses not to make payment and the house is put up on the auction block. A public sale will then be held in which the buyers will make bids based on the amount of delinquency fees, taxes and associated costs that are due. Properties have been known to sell for as little as 50 percent of their previous value. When a buyer wins the bid, they must be ready to pay cash or have the financing in place or the property may be lost to the next bidder in line.

If an investor is looking for a way to scoop up some low cost real estatePsychology Articles, tax deed sales is a great pool to fish from.

Article Tags: Deed Sales, Real Estate

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


It may be intimidating to approach tax deed sales. For information about entering the market, visit http://www.civicsource.com



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