Tax Deed Sales
A tax deed sale is the instrument of conveyance when a property is sold by a government body to pay for arrears of taxes.
All tax deed opportunities are a 50/50 partnership program.
Tax deed sales are typically purchased at 45-55 cents on the dollar of the retail value of the home. Tax deeds are purchased at a slightly reduced from the Foreclosure sales, as there is an additional cost to cure title. Rehab costs are commonly around $5,000, and will rarely exceed $10,000. After rehab, the homes are marketed at 10-20% below market value. As the best product at the lowest price in the neighborhood, the homes are able to be turned quickly.
3166 Mola St
Required Investment: $50,000
Estimated Sales Price: $69,000
Gross Profit Before Sales Expense: $19,000
% Projected Return: 38%Completely Renovated Deed In Possession Availability: Under Investor Deposit
13 Tennessee Ave #301
Required Investment: $60,000
Estimated Sales Price: $72,000
Gross Profit Before Sales Expense: $12,000 + RENT
% Projected Return: 36% (Locked-In)
Completely Renovated Condo Receive rent while waiting to sell Unit rented at $800 per month Renter is buying – have signed contract Availability: Under Investor Deposit
1021 Capri Isles Blvd 7
Required Investment: $48,000
Estimated Sales Price: $69,000
Gross Profit Before Sales Expense: $21,000
% Projected Return: 43%Completely Renovated Investment includes renovation costs Deed In Possession Availability: Under Investor Deposit
Tax Deed Sales Rules
Remember, this is a BUYER BEWARE sale.
Florida tax deed sales are held online or at county court house.The bidding for each property will start with the base bid.If you are the successful bidder, your bid amount, plus recording fees and documentary stamps, are due by 4:00 pm on the day of the sale.In accordance with Section 197.542(2), F.S., on all tax deed applications made on or after October 1, 2001, the high bidder shall post with the Clerk a non-refundable cash deposit of $200 at the time of sale to be applied to the sale price at the time of full payment.
SALE OF TAX CERTIFICATES FOR UNPAID TAXES (Section 197.432, F.S.):
Taxes become delinquent April 1st of each year. At that time, the Tax Collector begins preparing the tax certificate sale. A tax certificate is sold for all taxes not paid by June 1st. A tax certificate is a tax lien against the property. The certificate holder does not have any rights to the property. If no individual purchases a certificate on a piece of property at the certificate sale, the County assumes the certificate. There are two types of tax certificates: individual and County. The owner or interested party may redeem the certificate at any time by paying to the Tax Collector the delinquent taxes and interest earned by the certificate holder. (Section 197.472, F.S.) The tax certificate has a life of seven years. (Section 197.482, F.S.)
If a certificate is not redeemed, the certificate holder may force the issue by making an application for tax deed. A certificate must be two years old to be eligible for a tax deed application. (For county held certificates, the Board of County Commissioners makes application for the tax deed.) The application process must begin in the Tax Collector’s Office. The Tax Collector prepares the necessary paperwork (which includes the Tax Collector’s Certificate and a legal description of the property) and forwards it to the Clerk’s Office. The Clerk’s Office prepares the legal advertisement for the newspaper, the certified mailing of notices of the pending sale, the civil process to be served by the Sheriff’s Office, the calculation of the opening bid, answers questions from the public, and waits for the sale. The owner or interested party may redeem right up until the recording of the tax deed.
Tax Deed Sales FAQ
Q – What is a tax deed sale?
A – A tax deed sale is a public auction where real estate is sold to recover delinquent property taxes. (This is governed by Chapter 197 of the Florida Statutes, and Administrative Code 12D13.060, Florida Department of Revenue.)2) When/Where are the tax deed Sales held?
Tax deed sales are held on weekdays, generally at 9:00 am. This varies per County.
Q – What liens or encumbrances survive against a property after it is sold at a tax deed Sale?
A – Government liens and judgements survive the issuance of a tax deed and are satisfied to the fullest extent possible with any overbid monies from the sale. Governmental liens, not satisfied in full, survive the issuance of a tax deed and will remain against the property.
Q – Can the property owners stop the property from being sold for taxes?
A – The property owner or mortgage holder can redeem the property from the tax deed sale by paying the amounts owed to the Tax Collector and the Clerk of the Circuit Court. The total redemption in the office of the Tax Collector. (Many of the properties advertised for sale will be redeemed and will not be auctioned.)
Q – If I am the successful bidder at the sale, what do I need to do?
A – According to most County office policies, as the successful bidder you have until 4:00 pm the day of the sale to pay the balance, which includes your successful bid, documentary stamps, and recording fees. Payment can be made by cashiers check, cash, or money order at the Clerk’s Office. This total will include your bid amount, documentary stamps, and recording fees. The money must be paid by 4:00 pm the day of the sale.
Q – What if I am the successful bidder and fail to return with the payment?
A – The property will be re-advertised one time, and must be scheduled for sale within 30 days. Section 197.542(1), F.S. states: “The Clerk may refuse to recognize the bid of any person who has previously bid and refused, for any reason, to honor such bid.” Therefore, those individuals would not be allowed to bid at any future tax deed sales.
Q – Do I get a clear title with a tax deed?
A – All properties sold at a tax deed sale qualify under “buyer beware.” The purchase of a tax deed does not warrant or guarantee clear and marketable title. Note: Most title companies require the property to go through a quiet title lawsuit for the property to be able to have title insurance issued on property bought at a tax deed sale.
Q – What are some of the things I should know before the sale?
A – In order to participate, you must register prior to the sale. It is highly recommended that you research the properties prior to the sale day in order to understand what you are purchasing at the sale. (You should research for liens, zoning, restrictions, etc.)
Q – If I am the successful bidder at a tax deed auction, am I entitled to immediate possession of the property after a tax deed has been issued to me?
A – Section 197.542, F.S. states: “Any person, firm, corporation, or county that is grantee of any tax deed under this law shall be entitled to the immediate possession of the lands described in the Deed. If demand for possession is refused, the purchaser may apply to the Circuit Court for a Writ of Assistance upon five days’ notice directed to the person refusing to deliver possession. Upon service of the responsive pleadings, if any, the matter shall proceed as in chancery cases. If the court finds for the applicant, an order shall be issued by the court directing the Sheriff to put the grantee in possession of the lands.”
Q – How is the amount of the opening bid determined?
A – If the property is not homestead property, the amount of the opening bid equals the total of unpaid taxes and interest, the Tax Collector’s administration fees and expenditure fees required by the Florida Statutes to bring the property to delinquent tax sale. If the property is homestead property, half of the assessed value from the tax roll is added to the above amounts for the total opening bid.
Q – How long does it take to receive the tax deed?
You should have your tax deed within 5 to 7 days from the sale date.