Certificate of Purchase

A certificate of purchase is the official document issued to a successful bidder at a tax lien or tax deed sale. This certificate serves as proof of the investment and outlines the key terms including the property's legal description, the amount paid, the interest rate (for tax lien states), and the redemption period.

In tax lien states, the certificate of purchase is essentially the tax lien certificate itself. It represents the investor's legal right to collect the delinquent taxes plus interest from the property owner. If the owner fails to redeem, the certificate of purchase may be used to initiate the foreclosure process and potentially obtain ownership of the property.

In tax deed states, the certificate of purchase may be an interim document issued when the sale includes a right of redemption. The actual deed to the property is issued after the redemption period expires without the owner reclaiming the property. During this interim period, the certificate holder typically does not have full ownership rights but holds a secured interest in the property.

Investors should store certificates of purchase safely, as they are important legal documents. Some jurisdictions have moved to electronic certificates, while others still issue physical documents. Regardless of format, the certificate of purchase is your primary evidence of the investment and will be needed if you pursue foreclosure or claim the property.