Home Buying in 53210>Question Details

Contempo, Home Buyer in 53210

When purchasing from a tax deed sale auction does it have a title clean and clear?

Asked by Contempo, 53210 Wed Nov 10, 2010

I want to buy a property from a county on a tax deed sale auction and I am worry about the emcumbrances and other liens.

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I see that you are from the Milwaukee area. Here in Wisconsin, the tax sale does not give you clear title. You must do your own title check (hire a title company to discover any liens, loan, or other encumbrances).
1 vote Thank Flag Link Wed Nov 10, 2010
Short answer is No. Texas is a Tax Deed state as well, and you'll need to check on the specifics in your county (even counties can vary), but your main hurdle is going to be redemption periods. Most Tax auctions have redemption periods from a couple months to a couple years depending on homestead laws, which basically means that even after the auction, the previous owner can "redeem" the taxes, paying (usually) what you paid plus an interest rate. Most Tax Deed auctions will give you a "sheriff's deed" until the redemption period is expired, then you get a full warrantee deed. You usually can't do anything (sale/refinance, etc.) until you get the warrantee deed.

That being said, (in general) most Tax auction properties won't have a mortgage on it. Why? Because if it did, the bank would pay the delinquent taxes, then foreclose itself to protect it's interests. Now, it's not always, but most of the time it is the case. That's not to say it won't have other liens, judgements, IRS claims, etc., so you do need to do your homework. If you've got a good relationship with a Title officer, you can ask them to do a "quick search" on the property (most will do it for around $50), that will give you a one page summary of encumbrances on the property.

A last note about Tax sales, there is usually a reason the current owner let the property go. A lot of tax sale properties are trash, lots, irregular, have easements, etc. For my time invested in researching a tax property, I'd rather go after preforeclosure or foreclosure auction properties.

Good luck and get after it! Those deals are out there waiting for you!

Tony Z


Incidentally, "Team Naples" answer below is funny... "don't go with out a realtor", and "by the way, here's a condo you might like". Realtors don't have anything to do with Tax Deed Sales. Too funny.
Web Reference: http://www.ITFtraining.com
1 vote Thank Flag Link Wed Nov 10, 2010
No, there may very well be other issues. It varies from property to property.
1 vote Thank Flag Link Wed Nov 10, 2010
I am truly hoping that you are working with a Realtor that can guide you through the quagmire of Clear or Clean Title. A title company must be used to review, verify, and insure that the status of the property.

Contact a local Realtor in Milwaukee. Jeff Cubinski is located in Milwaukee and is a very talented professional and exactly what you will need.
0 votes Thank Flag Link Thu Feb 28, 2013
Again, why have you chosen not to work with a professional?.......this is more than likely a large purchase. All title work should be checked to confirm a clear title. Protect yourself and hire a professional to review all the details......Yes, you may have a small fee upfront but they may save you thousands in the future that the title does have issues.

Good Luck
0 votes Thank Flag Link Tue Nov 16, 2010
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