Latest Blogs & Articles

Tax sales in Texas…and what you should know!

Texas is one of the states that have what is commonly referred to as the “Super Tuesday” sale. Tax and trustee sales take place on the first Tuesday of every month; this is not for just one county, but for all counties in Texas. Even though the sales all take place on the same day, each county conducts its auctions in its own way and manner.

Most counties in Texas hold their tax sales at their county courthouses. But some counties do their business at other government buildings or convention and event centers. Make sure that you do your due diligence and research the county rules and procedures before attending the tax sale. The majority of the counties in Texas require that you register before you can be allowed to bid on any of the tax sale properties.

Tax sales have a few things you should be aware of and keep in mind:

1. When you attend a tax sale, the properties are generally cried by a judge, constable or sheriff.
2. Depending on the county rules, once a property has been bid on and purchased, payment will be required the same day of the purchase, paid in full with either cash or certified checks.
3. Different counties also have different rules for payment. Some may require payment within minutes of the sale being completed. Others will allow payment to be made by 4 p.m. or the close of business.

Tax sales are a great tool for investors; however, they do come with some caveats in the form of redemption rights. The previous property owner who lost their property to the tax sale can reclaim their property. Their opportunity to do this depends on how they used the property—be it homestead, agricultural, rental investment, etc.

The previous owner can reclaim their property by repaying the redemption fee, as well as any money spent by the purchaser that is deemed as required by and for the property. This money includes the purchase price of the tax sale and any payments required to bring the property current on any other required taxes. Also included is any money needed to make the house livable. For example, a new roof or windows would be considered necessities. But NOT included is the cost of installing a new pool or hot tub, or a fourth bedroom. If previous owner makes these payments to the tax sales purchaser by the allotted time, then the previous owner will reclaim their property.

Once the deed has been recorded, redemption periods begin and go into effect. Agricultural and homestead exempt properties may be redeemed up to two (2) years from the date the deed is recorded. All properties that do not meet these exemptions may be redeemed within six (6) months of their deeds being recorded.

Redemption fee structure owed to the buyer for the property to be redeemed:

Homestead or Agricultural:

First Year: Price of Sale + 25%
Second Year: Price of Sale + 50%

All Others:
Six Months: Price of Sale + 25%

Here’s another caveat to be concerned with: When you purchase a tax sale, you are paying the delinquent taxes up to the point of when the home went into foreclosure. This could be one, two or even several years before the tax sale took place. When the property is purchased, any delinquent taxes owed will be required to be paid in full as well. So be prepared to pay for more than just the auction price!

With some of these caveats, some may ask, why bother dealing with tax sales at all? When you purchase a tax sale property, ANY prior liens, whether they be bank mortgages, equity or maintenance liens, are ALL wiped out. Something to think about!

Stay tuned for more information regarding tax and trustee foreclosure sales and strategies!

You May also Like this

A user’s guide to ...

A user’s guide to the Harris County Tax Auction in Houston, Texas...