If property tax payments are late, in or around June of each year, a Tax Lien Auction is conducted by the County in which the property is located. People will bid to own a lien on your property (also called Tax Certificates)
Tax Lien Certificate Sale
People bid on the interest rate they are willing to accept in return for paying the taxes owed. If the property owner pays their back owed taxes, the lien holder is paid back the tax amount plus interest rate of their bid. If the property owner does not pay their back owed taxes, the lien holder can force the sale of the property at a Tax Deed Auction. When the property sells at the tax deed auction, the lien holder is paid back at that time.
Application for a Tax Deed
Somewhere in between 2-7 years, Certificate holders apply for a Tax Deed. This forces the County to hold an auction and sell the deed to the property.
The Tax Deed Auction
A Tax Deed Auction is held (online or in-person, depending on the county) and the highest bidder now owns that property. The winner of the auction becomes the new owner of the property. People who buy Tax Deeds either do so to actually live at or rent out the property OR they buy, fix up and re-sell (Flip it)
Tax Deed Overbid Surplus
Some Tax Deed Auctions end with the high bid being significantly more than what the property owner owed in property taxes. In these cases, some or all of the amount of money bid over the amount that was owed can be claimed by the person(s) who owned the property at the time of the sale. MOST previous owners DO NOT know this and never receive the notification of Surplus from the county because they already moved out of the home. Asset Recovery Businesses will seek out these people and offer assistance in claiming the surplus for a percentage of the unclaimed amount. Property Taxes are paid first. then any liens and then the previous owner.