Here are my 5 steps to buying tax liens online. How you follow out these steps is just a little different for the online tax sales. I like to use the acronym “STEPS” to make these 5 Steps for buying tax liens online easy for you to remember…
5 STEPS To Buying Tax Liens Online:
- Select where you will invest
- Track down the tax sale information
- Evaluate the tax sale properties
- Prepare to bid at the sale
- Show up and bid!
As I mentioned earlier these are the same five steps that you would use to get ready for any tax sale whether it is an online or live tax sale. When participating in the online tax liens sales, however, you may to go about these steps a little differently. Let’s take them one by one and go over what it is you need to do for each step.
Step 1: Select Where You Will Invest
If you want to invest in tax liens online, you are limited to the states that have online tax sales. Not every state in the US that sells tax liens has online auctions. When I first taught how to invest in tax liens online, there were only five states that had online tax lien auctions, only a few years later there were seven – Arizona, Colorado, Florida, Indiana, Maryland, Louisiana and Nebraska. Then in 2012, New Jersey, Iowa, Mississippi, and Missouri were added the list of states with online tax lien sales. And Tennessee and Texas added counties with online redeemable deed sales.
In the spring of 2020, with the entire U.S. under lock down due to the COVID-19 pandemic, counties in even more states began conducting their tax lien and redeemable deed sales online. Alabama and Georgia were added to the list of states with at least one county with online tax sales. These online tax sales are very different in each state, but they do have a few things in common, which brings us to step 2.
Step 2: Track Down The Tax Sale Information
This part is easy for the online tax sales because most, if not all, of the information you need is usually provided on the online bidding web site. To find out where to go you can call the county tax collector or treasurer or you can go to one of the online tax lien investing platforms listed below that conduct many of the online tax lien sales.
Platforms For Online Tax Lien Sales:
Step 3: Evaluate The Tax Sale Properties
Most of the counties with online tax sales make it easy for you to register and bid online. The hardest part of buying tax liens online is doing your due diligence for the tax sale properties. Unless you purchase a tax sale list from a tax sale list provider, or in some cases from the county, you don’t always get to see the addresses of the properties that are in the tax sale.
Instead, the properties are listed individually or in batches by an id number and you have to click on the property number to get the rest of the information on the property. Some counties do provide a lot of information about the properties on the tax sale web site, but you must click on each property individually to get the information. They might also provide a downloadable excel file with all the properties listed, but this list has very little information about the property.
Step 4: Prepare To Bid At The Tax Sale
You need to register for online tax sales days or in some counties, weeks ahead of the actual sale. You register for the tax sale and bid on the properties online. For some counties that are newer to conducting online tax sales, you may have to register with the online platform and register with the county.
For tax lien sales, you are not actually bidding on the property, but on a tax lien certificate that is issued on the property. The tax lien certificate or tax sale certificate gives the certificate holder first lien on the property and the ability to foreclose on the property if the lien is not satisfied by the state specified redemption period.
These tax sales usually require a deposit, and some of them have a non-refundable registration fee. Payment for any successful bids is required within a day or two of the close of the tax sale for counties that use wire transfers as the method of payment. For counties that use ACH Debit as the method of payment for tax liens, you usually must pay the day of the close of the tax sale. For these tax sales, you agree beforehand to allow the county treasurer to debit your account for the tax liens that you purchase.
Step 5: Show Up And Bid!
Bidding is easy for online tax sales because all you have to do is put your bids into your computer and, unlike the live tax sales, you have plenty of time to do it. The online tax sale web sites are usually open for bidding at least a couple of weeks before the tax sale is over, giving you plenty of time to bid as long as you register and get your deposit in on time. You do have to keep track of the time though, since the properties are usually separated into batches and a batch will close every hour – you must get your bid in before the batch closing time.
A few tax lien and redeemable deed auction have real time bidding, where you can bid online just as you would at the live sale. But thankfully, most do not have real time bidding and do not offer just one parcel at a time – or these sales would take quite a long time. Most will close the bidding on batches of parcels at a given time and do not publish bids until the end of the tax sale.
Many of the online platforms allow you to download an excel file of the tax sale properties and upload your bids all at once instead of putting them in individually. The important thing is to double check your bids before submitting them. If you bid on a property by mistake and you are the successful bidder, there is no taking it back. You will have to purchase that lien or forfeit any successful bids and your deposit and be barred from future tax sales. So just as with live tax sales, it’s important not to have any distractions while you’re bidding.
Are you bidding in the online tax sales?
The truth is, there is no real ‘secret’ to successful bidding at tax sales. It all comes down to knowing your competition. In other words what are the other bidders after, and how high are they willing to bid to get a tax lien? The only way to find this out is to go to enough tax sales so that you get to know who your competition is and how much their willing to pay.
Follow Us!