Types of Tax Foreclosure Houses
Houses are purchased for different purposes – for own occupation, letting it out for deriving continued income and “flipping” transaction by investors for resale. For whatever reason, buying houses from foreclosures and that too from tax foreclosed houses is the order of the day in U.S. Millions of houses are being foreclosed every year in the entire U.S. nation and tax foreclosed houses are a special variety of them. In fact tax foreclosed houses have already crossed the 6 million mark over the counties and metropolitan areas of U.S. country. Tax foreclosed houses are varied in their sizes and accommodation – single family house; multiple family apartment houses; town houses; condominiums and farm houses. The local and federal governments assess the value of these properties and based on the assessment levy the taxes. Apart from these yearly tax liabilities, the governments are also entitled for collection of taxes on mortgage loans borrowed by the property owners. In case these taxes are not paid promptly, then the taxing entities are compelled to take legal action as stipulated in the laws governing the State for collection of these government dues. The Internal Revenue Service (IRS) is empowered to issue Government Tax Lien Certificates on these house owners who have defaulted. Such Government Tax Liens get top priority in the Courts and by issue of the default notice to the respective house owner, the process for tax foreclosed houses is deemed to have commenced.
The taxing entities obtain a Court order for disposal of these tax foreclosed houses after duly notifying the commencement of the foreclosure process and not getting any response for clearance of the tax dues. The tax foreclosed houses are announced for sale through public auction as “deed sale” or sale of “Tax Deed Certificates”. In the case of deed sale, the auction is made for selling the deed of ownership of the property entangled as tax foreclosed houses to the highest bidder. Normally the tax foreclosed houses carry a price only to the extent of the tax dues together with interest and administration charges for the legal action taken thereon. This commencing bid in respect of these tax foreclosed houses will be virtually a fraction of the real value. The home buyers from these tax foreclosed houses at this stage are in for a great saving, as they get the ownership for a throw away price, not available to them in any other method. In respect of public auction of the Tax Deed certificates issued on these tax-foreclosed houses, basically the bidder takes up the responsibility of clearing the accumulated tax dues on the auction date and also assures the future payment of taxes. This way the government gets the tax dues cleared and also is assured of the payment of further taxes continuously. The bidder is entitled to collect whatever taxes are being paid with interest running from 6 to 18% thereon from the original house owner of the tax foreclosed house. This arrangement is valid for only up to a certain time period and if the house owner does not redeem the tax foreclosed houses in time, the bidder will be awarded the title of ownership of the property. In either way the investment is lucrative and is worth making. All these tax foreclosed houses are classified and listed neatly in the website ForeclosureListings.com for the searchers online.
