In many cases, properties liked yours will receive bids FAR beyond the amount of back taxes actually owed. Many states throughout the U. The county has rules in place where these excess proceeds can be claimed by their rightful owner — usually for a designated period of time which varies from state to state. However, this approach DOES make sense for an investor who has almost nothing to lose. Rather than spending your money, energy and efforts to create a great real estate listing and promote the heck out of it — the county will do all the work for you.
In many cases, their schedule will literally take years to pan out. I actually had to learn this lesson the hard way. They just keep it! I spent several hours doing some very high-level research on all 50 states and this was what I found click the map below to find out …. Talk to your attorney or CPA before you act on of this information. The fact of the matter is — there are thousands of auctions all around the country every year. Step 2: Get a delinquent tax list. There are a few ways to do this another of which is described here.
Step 5: Play the waiting game until the property has been foreclosed by the county and sold and the tax sale. Pursuing Excess Proceeds as a business offers some pros and cons. All are important to weigh in your decision on whether or not to add this strategy to your real estate investing repertoire.
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Seth Williams is a land investor and residential income property owner, with hundreds of closed transactions and nearly a decade of experience in the commercial real estate banking industry. He is also the Founder of REtipster. Our goal is always to provide our readers with the most up-to-date and relevant content so that we can continue to empower others!
What Happens to Excess Proceeds From a Foreclosure Sale
Please share your feedback. Sign up for our newsletter and learn how to take your real estate investing game to the next level. I want you to make GREAT money from real estate, in a way that helps people , doesn't require a lot of risk and leaves plenty of space for you to live your life.
That's how my business works and yours can too. Your email address will not be published. What do you want to add? This site uses Akismet to reduce spam. Learn how your comment data is processed. With the marketing I have done in land in the last couple of months, I have found my state have real high property tax rate which makes it hard to acquire. The owner only wants a few hundreds for their land, but even with that, the deal is tight. I am start wondering should I start looking at the lower property tax state.
Your thoughts? Why not just sell it yourself? Or are the underlying mortgages extinguished with the tax sale? Yes — underlying mortgages are extinguished with the tax sale 2. But to your point… selling it yourself does give you much more control over the process. I think in most cases, selling it yourself is probably in your best interests. Hello Andrew and Seth, You will need to check with the individual county and state but i have discovered when there is a mortgage and other RECORD liens the county has a process for them to be collected first.
Again check with the county of interest, but usually there is a time period in which the country holds the overages so that the Lien holders can collect, after this time period the owner may collect any overages remaining. Does that make sense? This happened to my family! Or at least getting the process started? Do we contact the appraisal district? It is in Grimes county, Texas. Good luck! Are you in Texas, if so, can you help me? What can I do? I have a question about a tax sale on piece of property I own in Georgia that the county has sold and holds my excess funds.
Can you please call me at I want to talk to someone who has actually received finder fees for this service and have recovered overages for a client. Purchase a tax delinquent list or call tax collectors office. I need to know how do I get the overage or excess fund list. Did you ever find out how to claim overage as a business in georgia? Hey Curtis! This post is almost exactly a year old now published on June 23, Hi Seth if property is purchase is closed after tax sale, but before 1 year redemption period is over buyer can still claim overage, right? Hi Alex. Some states have a delinquent tax sale, then 1 year of redemption time.
If a delinquent tax property is sold during this 1 year redemption period, the buyer can still claim overage, even though the buyer was not the delinquent tax property owner at the tax sale time, right? Alex, no. The tax sale happens first followed by a redemption period. During the redemption period the property owner the one foreclosed on can buy back the property for the auction sales price less taxes plus interest and fees.
What this is about: After the tax sale and all the taxes and fees are paid, and there is money left over overage the owner the one foreclosed on can collect on that overage, not the buyer at the tax sale. Jack Bosch has a program on this opportunity. Alex, In the first part of my previous statement I should have said that the property owner can buy back the property for the auction price plus interest and fees. Not less the taxes owed. Hi Seth, I have collected my excess proceeds and I want to know is it taxable?
Thanks Sure. I understand CA takes a while to pay on a claim. What states are best; still good profits and timely too, with no big drawbacks? I received a letter noting excess funds on a property sold at auction in the state of Texas where I was an heir to. Can I handle this on my own by available forms or do we need to get a lawyer involved? Or if no other involvement is necessary, is there a link to forms needed to take care of receiving those funds for the state of Texas.
Thanks for your help! Hi Victor — cool! No risk or money is involved as they work on contingency fee basis for percentage of funds recovered.
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Do you think this is legit…. He has been sick and recovering from lung cancer and only thing we can think of is a home he owned that was lost to foreclosure or tax auction…not sure as he lived in another state and did not provide details only that he lost his home?? Omg that I left my comment, guess not.
Anyway, my aunt was left the home of my grandparents appeox 7 or 8 years ago when the last one passed away. I have just learned the past 2 weeks that my aunt, now elderly, has never put title in her name nor paid any property taxes whatsoever. She never asked any family members to assist or we would have. Repairs are needed now and I will also pay the overdue taxes if allowed to make monthly payments. I am a fairly recent amputee with limited income from ss disability but definitely do able if taxes can be made into payments til caught up.
It has not appeared to be listed as a tax lien as of yet and am just panicked to just learn of this when I could have avoided this a while ago. Voluntary lienholders are lenders to whom the homeowner voluntarily gives an interest in the home. Involuntary lienholders are creditors who sue to get a judgment against you. A common example is a credit card company that sues, gets a judgment against you for the amount owed on the credit card, and then records that judgment as a lien against your home.
The credit card company involuntary lienholder gets nothing. So how does the foreclosed homeowner know if there are Excess Proceeds available?
The problem is the last known address is usually the foreclosed property, which the homeowner has vacated without providing a forwarding address. The homeowner, armed with the knowledge that a Trustee Sale can generate Excess Proceeds, should track the Trustee Sale process. When will the Trustee be depositing the proceeds with the county treasurer and filing the required lawsuit? Inform the Trustee that you are the foreclosed homeowner and want to make a claim for the Excess Proceeds. Excess proceeds can remain on deposit with the county treasurer for up to 2 years.
Certain deadlines begin to run when the Trustee deposits the Excess Proceeds and files the lawsuit.
Upon receiving notice that the lawsuit has been filed, you should immediately contact one of the legal aid offices listed below for free legal help in recovering Excess Proceeds. You can apply online for free legal help here or click here for a directory of legal assistance in Arizona.
This article provides general information about Excess Proceeds. It does not address your specific factual circumstances and should not be relied on as legal advice. Please contact an attorney for legal advice specific to your situation. Avoiding Foreclosure of Your Home.
Excess Proceeds | County of Fresno
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County Tax Assessors. The dividends can be taken as cash, used to reduce a premium, reinvested to earn more interest or to purchase more insurance. Only spouses are exempt from getting taxed in life insurance policies. Anyone else, like a parent or sibling, will have to pull the proceeds from an estate.
This means the money is subject to taxation, if the estate is large enough. If someone were to pass away and have an estate valued above that amount, any amount above the threshold would be taxed at 40 percent.