Quick Primer on Delinquent Tax Certificates, Tax Deed Sales, and Foreclosure Sales

What are they and what are the differences? With links to related articles

Palm Coast, FL – May 16, 2008 – Even though I’ve written several articles in the past on delinquent property taxes, tax certificates, tax deeds, and foreclosure, I still get lots of inquiries. Hopefully this review will answer most people’s questions.
 
Delinquent Property Taxes and Tax Certificates
 
When delinquent property taxes remain unpaid, the Tax Collector’s office sells Tax Certificates at auction. A tax certificate does not vest any ownership interest in the property. It does represent a priority lien on the property. It is simply an investment vehicle. You bid against others for the certificates. Bidding is on the interest amount to be charged. The lowest interest bid wins the certificate. The winning bidder pays the delinquent taxes for the year bid (including interest, penalties, and fees). When the property owner pays the back taxes, the certificate holder is reimbursed plus accumulated interest. This year’s certificate auction is being held on-line.
 
Tax Deed Sale
 
After holding a tax certificate for at least two years, the holder may apply for a tax deed sale. This is an advertised public auction. The minimum bid is the amount of back taxes plus interest, penalties, etc. The certificate holder may also bid but has no priority position in the auction. Tax deeds can come with baggage such as other liens or mortgages. Be sure you do your due diligence before bidding.
 
Foreclosures
 
A foreclosure sale is held when the property owner defaults on a mortgage. After proper notification and advertisement, an auction is held at the courthouse. The foreclosing lender will surely be at the auction to protect their interest. They will bid up to the default amount or possible less if they think the property has become devalued. Again, bidders should do their homework. Foreclosures may come with excess baggage too; other liens, IRS attachments, tenants, owners who don’t want to move out, etc.
 
Here are some other articles I’ve written which may provide more detail (most recent listed first):
 
 
 
 
 
 
 
 
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