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Tax Lien Home Investing

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By : Karim El Sheikh    99 or more times read
Most people are well aware of what taxes are and what buying a home is all about, but how about tax lien homes? When thinking of buying a property, it will be a thing for you to know every minor detail about all aspects of buying a property. Whether you own a home or are on the search for a new one, you should most certainly familiarize yourself with tax lien homes.

Understanding What Tax Lien Is

So what's a tax lien? Let’s begin with the term “lien” first. A lien refers to the way a lender uses a property to settle outstanding amounts or debts. It refers to the legal rights of a government to hold back the use of the property if the owner has some pending taxes to pay off. Now a tax on the other hand refers to the financial charges imposed by the government. “Liens” are similar to tax levies. However, a tax levies refer to a government actually seizing a property, while a tax lien involves both seizing properties and legally notifying property owners of the legal rights of seizing the property.

Types of Taxes Involved In a Tax Lien

Virtually all kinds of owed taxes can be involved in tax liens, including payrolls, incomes, sales, county, city, federal taxes, etc. The most common type is the local tax lien. However, in all the different situations, the property becomes collateral until the debts are settled.

‘Run with the Land’ by Buying Homes

Someone that ‘runs with the land’ by purchasing a home with a lien is responsible for ensuring that he/she settles the lien. A new buyer must be informed in writing if he/she is buying a home that has a tax lien on it. It is absolutely necessary for the buyer to be informed because the lien is going to be attached to the house all along, until all taxes are paid off.

How to Get Rid of Tax Liens

Tax liens must be avoided at all costs. They are also particularly bad for your credit reports. Fortunately, you can get them off the title of your home or property. The obvious way of doing this is by paying any taxes you owe. Another option of getting rid of a tax lien is when the mortgage company pays the taxes for you, but then it will charge you an extra fee on your monthly mortgage payment.

How to Avoid Buying Tax lien Homes

The best way to avoid getting yourself a tax lien home is by doing a title search. The best way to accomplish this is by hiring a title company or a title attorney. The company or attorney will help you in conducting a thorough search through legal property documents, to find out whether or not the property has a tax lien attached to it. Not only will the search help you avoid buying a tax lien home, but will also help you learn of all the ‘title encumbrances’ (which are all the negatives of the title).

There is something quite interesting about tax liens though. While it may sound like a complete no good, in some cases it turns out to be a low risk high return on investments. But it is important to note that it is not so for everyone. Tax lien investments can prove to be great for family funds and private equity. However, one still needs to be very careful in matters of tax liens. is the source for finding all tax liens nationwide. Invest in tax liens and secure your investment.

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