Tax Lien Certificate ? Providing Solutions to Financial Troubles ...

A certificate of release of tax lien serves as a hard copy of the lien that may be auctioned off or sold in case a property owner fails to pay his own taxes. A tax lien certificate owner may receive 16% to 50% annualized return based on the certificate?s value.

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Investors who purchase a certificate of tax lien release do not own the property involved, but they own a note on it for the redemption period given to the property owner. If the owner fails to pay the tax on the agreed deadline, the buyer of the tax lien certificate can take over the deed on the estate without having to pay mortgages, mechanics liens and other forms of junior liens. However, if the owner manages to pay his obligations, then the dues will be directed to the local tax collector?s office. The tax lien certificate is then turned in exchange for the purchase value of the certificate plus interest.

Tax Lien Sales - Other Information

The U.S. county that sells the most tax liens is Maricopa, Arizona. The county?s tax lien sales in 2011 reached 22,510, valued at over $63 million. This was for the 2009 tax year, when 39,037 certificates were advertised. In the United States, anyone can participate in the sale as long as he or she is registered with the Treasurer?s office. Tax lien sales may not only involve currently owned property but also after-acquired property. Investors who decide to buy a tax lien should take into account that the lien is illiquid and the property involved could come with problems that would be left to them, as the new owner, to solve.

Tax Lien Auction - Process

Treasurers? offices only hold public auctions for tax liens once a year on different dates. Participants are given a lot number for bidding and are required to pay the full amount of their bid upfront or on a given deadline, 48 hours at the latest. The average bid usually starts at 16%, and certificates that fail to receive bids are deemed ?struck to the state? at the 16% rate. Bidders are held responsible for their own accounts, whether they represent one or multiple buyers. Some counties conduct their tax lien auction online to reach more potential purchasers. In this situation, bidders are required to pay a deposit online before the auction begins.

Source: http://www.amillionlives.net/tax-lien-certificate-providing-solutions-to-financial-troubles.html

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