What You Need To Know About Redeemable Tax Deed

For potential investors and first-time buyers planning to buy delinquent properties on auction, here are some important things you have to consider before buying a piece of property. Terra International Realty will explain as simply as possible how and what you need to know about redeemable tax deed.

• As a backgrounder, if your primary goal is to make your money earn some more money you have to buy a tax lien certificate. In this type of auction sale you only buy the unpaid taxes of a certain property. If and when the owner decides to redeem or get his property back, the owner has to pay the taxes you paid for his property, plus interests which is from 8-16% depending on the state, as every state has its own laws. If the owner doesn’t redeem you can start foreclosure proceeding to claim ownership on the delinquent property.   In most cases, you need less money in buying tax lien certificates than tax deed.
• On the other hand, a redeemable tax deed is like a combination of both tax lien and tax deed. You are actually buying the deed to the property. In other states, like Texas, once you buy a redeemable tax deed you are considered the legal owner and can immediately move or claim the property even if somebody is living there once the deed had been recorded.  Even if the owner has redemption rights, he is no longer considered the rightful owner.  But in some other states, you cannot take possession of a property within a certain period or amount of time as prescribed by the state under redeemable tax deed.  This gives the owner the chance to redeem or get his property back by paying the full amount of bid for the deed and a considerable amount of interest and penalty. The only time the tax deed holder becomes the new legal owner of the property is when the previous owner failed to redeem within the redemption period.   Remember, tax deed sales, almost always, cost much higher, that’s why you need more capital in buying a tax deed.

In Texas and Georgia, if the owner decided to redeem even a few days after the deed has been recorded, the owner still pays the full amount of penalty for the redemption period, which is, in most cases, for two years. The buyer will, likewise, get the full amount of interest and penalty whether it has been redeemed in two weeks or two years.   The penalty is not computed annually, very much unlike banks or other financing institutions in computing interest.

 Tax Liens Seminars, for your information and guidance is hereby naming the U.S. states and single city that sell Redeemable Deeds: Connecticut, Delaware, Georgia, Hawaii, South Carolina, Tennessee, Texas and the City of Philadelphia in Pennsylvania. And, it is only Shelby County in Tennessee that conducts on-line tax sale.