Tax Deed Sale

A tax deed sale is a public auction conducted by a government authority where actual ownership of tax-delinquent properties is transferred to the highest bidder. Unlike tax lien sales where investors purchase the debt, tax deed sales convey the property itself. The winning bidder receives a deed to the property, typically after the payment is made in full.

Tax deed sales occur in states that follow the "tax deed" system rather than the "tax lien certificate" system. Some states use both systems depending on the circumstances or county. The auction is usually conducted by the county treasurer, tax collector, or a designated auctioneer, and may take place in person at a courthouse or online through approved auction platforms.

The bidding at tax deed sales typically starts at the total amount of delinquent taxes, penalties, interest, and administrative costs. In competitive markets, bidding can escalate well above the minimum, but properties are often still acquired below their fair market value. Payment terms vary — some jurisdictions require full payment at the auction, while others allow a deposit with the balance due within a specified period.

Investors at tax deed sales should be prepared for the possibility that the property may come with complications. Unlike a traditional real estate purchase, tax deed sales are typically sold "as-is" without warranties, inspections, or title insurance. The winning bidder may need to evict occupants, address property damage, clear title issues through a quiet title action, and handle any other problems that arise. Despite these challenges, tax deed sales remain one of the most direct paths to acquiring real estate below market value.