What Is a Government Tax Foreclosure Property?

by Shelby Lee

Overview

Profit from foreclosure listings

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A government tax foreclosure property sale is a good way to start real estate investing or to buy your first home. These homes are usually offered for pennies on the dollar. Some buyers can purchase a $150,000 home for as little as $5,000.
Properties In Default

If a homeowner cannot make house payments or pay taxes on a house, the IRS will place a Government Tax Lien on the property, giving the owner 10 days to bring the account up to date.

Short Sale Options

Often the homeowner will list the property with a realtor at a discounted rate. Interested buyers are invited to make offers for a short sale. The lender may or may not accept these offers, depending on what is owed and the amount of the anticipated loss.
Government Tax Foreclosure

If the homeowner cannot bring the account up to date, the government will foreclose. The owners are evicted and the home is placed for auction.
The Public Auction

At public auction, the property is placed for sale at an original bidding amount that is equal to the taxes due on the property. Homes in valued areas usually go for higher amounts than properties in de-valued areas.
Where to Find Foreclosed Properties

The best option is to look in your local newspaper for foreclosure listings. Internet searches will work but most foreclosure sites require a fee for full access.