A tax lien can be applied to a home by the federal or state government when a person has not been paying their taxes. The lien can later be used to take possession of the home or property if it seems that the owner is planning on evading taxes.
The owner of the home has to pay all the taxes within a set period of time or else the property in question can be auctioned off publicly by the government.
Buyers of homes made available through government tax foreclosures should be aware that the state and federal government offers no warranty on any part of the property when it is sold and the buyer is assuming all risks associated with the purchase. There have been instances in which a buyer proffers the winning bid without seeing the property and after the sale, attempts to back out. The state and federal governments may, at their discretion relieve someone of their obligation to complete the purchase but the 10 percent deposit required at the time of the sale will be forfeited.
The buyer who has backed out of the purchase could also be made to pay any difference between the price of the property they were going to pay and the price that the same property is resold for after it is auctioned a second time. Even though government tax foreclosure properties can be one way to save lots of money on a real estate purchase, anyone thinking about buying property in this way should be aware of the risks involved as well.
Tax Sales: Not Always Final Immediately
In the majority of states, a home that has been bought at a public auction as a government tax foreclosure can still be bought back by the original owners within ten days of the auction. If this occurs and the winning bidder at the auction is not able to purchase the property, they will be given their 10% deposit back.
Follow-up bids are also permissible at government tax foreclosure auctions in some states. These bids are made after the auction has ended and must be for a price that is at least 10% higher than the original winning bid was.
If an individual who owns a home receives a federal income tax lien, paying off their debt is the best way to avoid getting involved in the government tax foreclosure process. Programs that allow homeowners and the government to reach a compromise regarding payment are available from the IRS, federal governments, and state governments. If a person chooses to ignore these financial problems, however, their property will usually be foreclosed on without additional warning.
The owner of the home has to pay all the taxes within a set period of time or else the property in question can be auctioned off publicly by the government.
Buyers of homes made available through government tax foreclosures should be aware that the state and federal government offers no warranty on any part of the property when it is sold and the buyer is assuming all risks associated with the purchase. There have been instances in which a buyer proffers the winning bid without seeing the property and after the sale, attempts to back out. The state and federal governments may, at their discretion relieve someone of their obligation to complete the purchase but the 10 percent deposit required at the time of the sale will be forfeited.
The buyer who has backed out of the purchase could also be made to pay any difference between the price of the property they were going to pay and the price that the same property is resold for after it is auctioned a second time. Even though government tax foreclosure properties can be one way to save lots of money on a real estate purchase, anyone thinking about buying property in this way should be aware of the risks involved as well.
Tax Sales: Not Always Final Immediately
In the majority of states, a home that has been bought at a public auction as a government tax foreclosure can still be bought back by the original owners within ten days of the auction. If this occurs and the winning bidder at the auction is not able to purchase the property, they will be given their 10% deposit back.
Follow-up bids are also permissible at government tax foreclosure auctions in some states. These bids are made after the auction has ended and must be for a price that is at least 10% higher than the original winning bid was.
If an individual who owns a home receives a federal income tax lien, paying off their debt is the best way to avoid getting involved in the government tax foreclosure process. Programs that allow homeowners and the government to reach a compromise regarding payment are available from the IRS, federal governments, and state governments. If a person chooses to ignore these financial problems, however, their property will usually be foreclosed on without additional warning.
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