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How to Purchase Tax Foreclosures Homes

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By : Fiona Livnat    99 or more times read
When a home owner defaults on income or property taxes, his property is foreclosed upon and is known as a tax foreclosure. Any type of tax is accounted for like property, federal, state or income taxes. Tax foreclosures are great opportunities for investors to buy properties.

The time line of a tax foreclosure depends on the kind of tax and where it is implemented. For instance, the process may not begin after several years of recurring unpaid taxes. In the time of economic down turn many unemployed persons and home owners know they can lose their homes to foreclosure if they default on the mortgage payments. However many do not know that government can record a tax lien to their property for non payment of taxes and if those taxes in addition to interest and penalties are not paid in a said period of time, then the government like any lien holder, can foreclose on the homes and recover the tax amount. The method by which tax foreclosures are sold off can vary from federal to state to county level.

Being the taxing agency of the federal government, the IRS (Internal Revenue Service) has all power to record a tax lien against property owned by delinquent tax payers. If the IRS estimates the liability, sends a notice and demand for payment and tax payer defaults on payment within 10 days of notification, it can send a Notice of Federal Tax lien. The IRS does sell properties seized for defaulting taxes.

Tax foreclosures are great opportunity for investors looking at purchasing homes at a discount. You can take the following steps to invest in tax foreclosures.

  1. Locating tax foreclosures: Information is available on local county websites and a little internet research will give you a great deal of information. The local delinquent taxes office may also be consulted.

  2. Get the property appraised: Get three or four appraisals of the property that interests you to determine its true condition and its approximate value that will help you in your negotiations.

  3. Negotiate or place a bid: Most tax foreclosures are sold off at auctions. So attend the auction and start negotiating by placing a bid along with others bidding for the property.

  4. Get your finances ready: Many individuals are unable to pay in cash for their homes. Check with banks if they can offer you loans. The mortgage lending process is lengthy, so you may have to apply at the earliest as tax foreclosures offers will close soon.

  5. Look for grant funding: Many federal or local government grants may be available which can be made use of. First time buyers especially have federal grants to help them. Government and private organizations have many grants to offer.

By following some of the above methods one can wisely invest in tax foreclosures.
Fiona Livnat is an author with expertise in real estate foreclosures. She has over ten years of experience in writing about tax foreclosures. Her commitment to help people is reflected in her writing. For more details please visit

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