Tax Sale Buyer Guide:
Getting Started
One of the first things to consider before investing in Tax Sale Properties is to research the property that you are interested in purchasing. Before a poperty is advertised to be sold, the Tax
Commissioner or other Firm must conduct a diligent search on the property. Following their search they must then notify all interested parties or lien holders. This process eliminates much of the burden of the Tax Sale Purchaser. Keep in mind, when a property is sold at tax sale, most liens are erased once foreclosure of the right of redemption is completed, this includes Mortgages and other instruments. However, these owners and / or interest holders are entitled to redeem the property within 12-months of the execution (sale of property). It is strongly suggested that all buyers go to see the property in person and review the Warranty Deed that is noted in the property deion as advertised in the newspaper. If the property is located in a private gated community you should call your Tax Commissioner to get access to see the parcel. Legal deions in the newspaper are intended to show where a property is located, however ,sometimes they can be vague or confusing. If you are unsure of the location of a property call your Tax Commissioner and ask for assistance. Always compare the properties legal deion to the Ariel photo (Usually located in your local Tax Assessors office Mapping department) to
make sure the property is not land locked or inaccessible.
Bidding Strategies
As Tax Sale day arrives it is important to know which properties that you intend to bid on. You should be able to recognize the deion as it is read. Investors have many different bidding strategies. As new laws passed enabling Tax Sale Purchasers to collect as much as 60% return on their investment if a property is redeemed, bidding strategies have changed. Some Investment firms open their bid as high as the tax appraised value of the property, though this is still rare in smaller counties you may run into this stronghold tactic once in a while. For the most part you should base your bid on what you perceive as a smart investment. This can be achieved in one or two ways, by remembering that 20% to 60% return on your investment is a sound philosophy,
unlike the stock market you are virtually guaranteed that in the worst case scenario, you will be awarded all of your money back if there is a problem with the sale. Secondly, if the property is not redeemed, your bid should be low enough that you take possession a piece of property at a discounted rate. One last thing to consider is that if the property is connected to that of your own, and could dramatically increase the value of your property, in this case appraised value could be a definite consideration in your bidding process.
Foreclosure of the right to redeem
It is your responsibility as a purchaser of a Tax Sale Property to foreclose the right of redemption on that property. Georgia Code Sections 48-4-40 through 48-4-48 provide the complete process.
The following is a condensed version of these codes: When real property is sold under a tax execution (sold at tax sale), the original taxpayer or any persons having a right, title, interest in, or lien upon the property may redeem the property at any time within 12 Months from the date of the purchase at tax sale by paying the redemption price. The property may be redeemed at any time during this period until the Tax Sale Purchaser terminates the right to do so by giving proper legal notice. The 12-month limit does not begin to run, however, until the Tax Purchaser pays the
amount that he or she bid. (After your purchase get a receipt, signed and dated by the tax commissioner) The Tax Purchaser is not prohibited from consenting to redemption after the statutory period has expired, and as a matter of grace grant such a privilege.
Monies to be paid to you from the Original Debtor at time of redemption The redemption price to be paid to you, if the original debtor chooses to redeem is the amount paid for the property at the Tax Sale, plus 20% percent of that amount for the first year, or fraction of a year, elapsing between the sale date and the date the redemption is made, plus any tax paid on the property during this period by the Tax Purchaser after the sale. If redemption is not made within the 12-month redemption period and after the notice terminating the right to redeem has been properly issued and advertised, there must be added to the redemption price the sheriff's cost of serving notice and the cost of publishing notice.
AMENDED CODE SECTION REGARDING REDEMPTION PREMIUMS
Said title is further amended by striking Code Section 48_4_42, relating to the amount payable for
redemption, in its entirety and inserting in lieu thereof a new Code Section 48_4_42 to read as
follows:"48_4_42. The amount required to be paid for redemption of property from any sale for taxes as provided in this chapter, or the redemption price, shall with respect to any sale made after July 1, 2002, be the amount paid for the property at the tax sale, as shown by the recitals in the tax deed, plus any taxes paid on the property by the purchaser after the sale for taxes, plus any special assessments
on the property, plus a premium of 20 percent of the amount for each the first year or fraction of a year which has elapsed between the date of the sale and the date on which the redemption payment is made and 10 percent for each year or fraction of a year hereafter. If redemption is not made until more than 30 days after the required notice provided for in Code Section 48_4_45 has been given, there shall be added to the redemption price the sheriff?s cost in connection with
serving the notice, and the cost of publication of the notice, if any, and the further sum of 20 percent of the amount paid for the property at the sale to cover the cost of making the necessary examinations to determine the persons upon whom notice should be served. All of the amounts required to be paid by this Code section shall be paid in lawful money of the United States to the purchaser at the tax sale or to the purchaser?s successors."
20% During the first year Add 10% A year and a day
30% plus expenses return if redeemed After redemption period has expired The Tax Sale Purchaser is to make out an original notice in accordance with a form shown in the statutes and provide a copy for each person to be served. The purchaser is to deliver these,
together with a list of persons to be served, to the sheriff of the county in which the land is located, not less than 45 days before the date set in the notice for termination of the right of redemption. Within 15 days, the sheriff must serve a copy of the notice upon all persons on the list residing in the county and make an entry of such service on the original notice. Leaving a copy of the notice at the residence of any person required to be served is considered sufficient service. If the sheriff makes an entry that he or she has been unable to serve the notice on any person, the purchases must immediately have it published in the official county newspaper once a week for two consecutive weeks. This constitutes service.
Upon payment of the sheriff's cost, the original notice must be returned to the Tax Sale Purchaser. The notice and entries on it may be recorded on the deed records in the Clerk of Superior Court's Office in the county in which the land is located.
In the event that the property is redeemed by the Original Debtor or interested parties (Mortgage
Companies, Banks or Lien Holders etc.), the Tax Sale Purchaser must make a quitclaim deed (Release of Claim) to the Original Delinquent Taxpayer, reciting, among other things, who paid the redemption money. The redemption of the property gives back to the Original Delinquent Taxpayer the title conveyed by the tax sale, subject to all liens existing at the time of sale.
If the redemption is made by a creditor of the Original Delinquent Taxpayer or other persons having interest in the property, the amount expended by either constitutes a first lien on it and must be paid prior to any other claims on the property. However, it is necessary that the quitclaim deed have been properly recorded in the Clerk of Superior Court's Office.
The Purchaser of a Tax Sale Property may sale the property before the redemption period has expired. However, the person buying from the Tax Sale Purchaser acquires the defeasible (i.e., can be annulled) title of the Tax Sale Purchaser, subject to the right of the Original Delinquent Taxpayer to redeem it within the period prescribed by law (12-months).Although, as noted above, the purchaser receives only a defeasible title before the redemption period expires, the purchaser acquires sufficient interest in the property to render him or her liable for the taxes that become
due on it. No Tax Sale Purchaser is entitled to rents and profits arising from the property during the redemption period. A Tax Sale Purchaser may obtain a court order to enable them to make improvements upon the property in the event that the improvement is aimed at the preservation of the value of said property, i.e. a leaking roof that is causing water to damage a home.
A title under a tax deed properly executed prior to July 1, 1989 shall ripen by preion after a
period of seven years from the date of execution of that deed. However, see your local real estate
attorney to inquire about a silent title action.
A title under a tax deed executed on or after July 1, 1989 shall ripen by preion after a period of four years from the date of execution of the deed.Notice of foreclosure of the right to redeem
property sold at the tax sale shall not be required to have been provided, in order for the title to such property to have to such ripened
Getting Started
One of the first things to consider before investing in Tax Sale Properties is to research the property that you are interested in purchasing. Before a poperty is advertised to be sold, the Tax
Commissioner or other Firm must conduct a diligent search on the property. Following their search they must then notify all interested parties or lien holders. This process eliminates much of the burden of the Tax Sale Purchaser. Keep in mind, when a property is sold at tax sale, most liens are erased once foreclosure of the right of redemption is completed, this includes Mortgages and other instruments. However, these owners and / or interest holders are entitled to redeem the property within 12-months of the execution (sale of property). It is strongly suggested that all buyers go to see the property in person and review the Warranty Deed that is noted in the property deion as advertised in the newspaper. If the property is located in a private gated community you should call your Tax Commissioner to get access to see the parcel. Legal deions in the newspaper are intended to show where a property is located, however ,sometimes they can be vague or confusing. If you are unsure of the location of a property call your Tax Commissioner and ask for assistance. Always compare the properties legal deion to the Ariel photo (Usually located in your local Tax Assessors office Mapping department) to
make sure the property is not land locked or inaccessible.
Bidding Strategies
As Tax Sale day arrives it is important to know which properties that you intend to bid on. You should be able to recognize the deion as it is read. Investors have many different bidding strategies. As new laws passed enabling Tax Sale Purchasers to collect as much as 60% return on their investment if a property is redeemed, bidding strategies have changed. Some Investment firms open their bid as high as the tax appraised value of the property, though this is still rare in smaller counties you may run into this stronghold tactic once in a while. For the most part you should base your bid on what you perceive as a smart investment. This can be achieved in one or two ways, by remembering that 20% to 60% return on your investment is a sound philosophy,
unlike the stock market you are virtually guaranteed that in the worst case scenario, you will be awarded all of your money back if there is a problem with the sale. Secondly, if the property is not redeemed, your bid should be low enough that you take possession a piece of property at a discounted rate. One last thing to consider is that if the property is connected to that of your own, and could dramatically increase the value of your property, in this case appraised value could be a definite consideration in your bidding process.
Foreclosure of the right to redeem
It is your responsibility as a purchaser of a Tax Sale Property to foreclose the right of redemption on that property. Georgia Code Sections 48-4-40 through 48-4-48 provide the complete process.
The following is a condensed version of these codes: When real property is sold under a tax execution (sold at tax sale), the original taxpayer or any persons having a right, title, interest in, or lien upon the property may redeem the property at any time within 12 Months from the date of the purchase at tax sale by paying the redemption price. The property may be redeemed at any time during this period until the Tax Sale Purchaser terminates the right to do so by giving proper legal notice. The 12-month limit does not begin to run, however, until the Tax Purchaser pays the
amount that he or she bid. (After your purchase get a receipt, signed and dated by the tax commissioner) The Tax Purchaser is not prohibited from consenting to redemption after the statutory period has expired, and as a matter of grace grant such a privilege.
Monies to be paid to you from the Original Debtor at time of redemption The redemption price to be paid to you, if the original debtor chooses to redeem is the amount paid for the property at the Tax Sale, plus 20% percent of that amount for the first year, or fraction of a year, elapsing between the sale date and the date the redemption is made, plus any tax paid on the property during this period by the Tax Purchaser after the sale. If redemption is not made within the 12-month redemption period and after the notice terminating the right to redeem has been properly issued and advertised, there must be added to the redemption price the sheriff's cost of serving notice and the cost of publishing notice.
AMENDED CODE SECTION REGARDING REDEMPTION PREMIUMS
Said title is further amended by striking Code Section 48_4_42, relating to the amount payable for
redemption, in its entirety and inserting in lieu thereof a new Code Section 48_4_42 to read as
follows:"48_4_42. The amount required to be paid for redemption of property from any sale for taxes as provided in this chapter, or the redemption price, shall with respect to any sale made after July 1, 2002, be the amount paid for the property at the tax sale, as shown by the recitals in the tax deed, plus any taxes paid on the property by the purchaser after the sale for taxes, plus any special assessments
on the property, plus a premium of 20 percent of the amount for each the first year or fraction of a year which has elapsed between the date of the sale and the date on which the redemption payment is made and 10 percent for each year or fraction of a year hereafter. If redemption is not made until more than 30 days after the required notice provided for in Code Section 48_4_45 has been given, there shall be added to the redemption price the sheriff?s cost in connection with
serving the notice, and the cost of publication of the notice, if any, and the further sum of 20 percent of the amount paid for the property at the sale to cover the cost of making the necessary examinations to determine the persons upon whom notice should be served. All of the amounts required to be paid by this Code section shall be paid in lawful money of the United States to the purchaser at the tax sale or to the purchaser?s successors."
20% During the first year Add 10% A year and a day
30% plus expenses return if redeemed After redemption period has expired The Tax Sale Purchaser is to make out an original notice in accordance with a form shown in the statutes and provide a copy for each person to be served. The purchaser is to deliver these,
together with a list of persons to be served, to the sheriff of the county in which the land is located, not less than 45 days before the date set in the notice for termination of the right of redemption. Within 15 days, the sheriff must serve a copy of the notice upon all persons on the list residing in the county and make an entry of such service on the original notice. Leaving a copy of the notice at the residence of any person required to be served is considered sufficient service. If the sheriff makes an entry that he or she has been unable to serve the notice on any person, the purchases must immediately have it published in the official county newspaper once a week for two consecutive weeks. This constitutes service.
Upon payment of the sheriff's cost, the original notice must be returned to the Tax Sale Purchaser. The notice and entries on it may be recorded on the deed records in the Clerk of Superior Court's Office in the county in which the land is located.
In the event that the property is redeemed by the Original Debtor or interested parties (Mortgage
Companies, Banks or Lien Holders etc.), the Tax Sale Purchaser must make a quitclaim deed (Release of Claim) to the Original Delinquent Taxpayer, reciting, among other things, who paid the redemption money. The redemption of the property gives back to the Original Delinquent Taxpayer the title conveyed by the tax sale, subject to all liens existing at the time of sale.
If the redemption is made by a creditor of the Original Delinquent Taxpayer or other persons having interest in the property, the amount expended by either constitutes a first lien on it and must be paid prior to any other claims on the property. However, it is necessary that the quitclaim deed have been properly recorded in the Clerk of Superior Court's Office.
The Purchaser of a Tax Sale Property may sale the property before the redemption period has expired. However, the person buying from the Tax Sale Purchaser acquires the defeasible (i.e., can be annulled) title of the Tax Sale Purchaser, subject to the right of the Original Delinquent Taxpayer to redeem it within the period prescribed by law (12-months).Although, as noted above, the purchaser receives only a defeasible title before the redemption period expires, the purchaser acquires sufficient interest in the property to render him or her liable for the taxes that become
due on it. No Tax Sale Purchaser is entitled to rents and profits arising from the property during the redemption period. A Tax Sale Purchaser may obtain a court order to enable them to make improvements upon the property in the event that the improvement is aimed at the preservation of the value of said property, i.e. a leaking roof that is causing water to damage a home.
A title under a tax deed properly executed prior to July 1, 1989 shall ripen by preion after a
period of seven years from the date of execution of that deed. However, see your local real estate
attorney to inquire about a silent title action.
A title under a tax deed executed on or after July 1, 1989 shall ripen by preion after a period of four years from the date of execution of the deed.Notice of foreclosure of the right to redeem
property sold at the tax sale shall not be required to have been provided, in order for the title to such property to have to such ripened
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