Tax Lien Investing

7 Steps To Buying Tax Liens Online

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The Simple Steps To Investing in Tax Lien Certificates Online

It’s a very simple process to purchase tax liens. More and more states are moving to online auctions for tax defaulted property. This means anyone in the world with an internet connection and the funds to invest can participate in an online tax defaulted property auction.

How To Buy Tax Liens Online

The following is a basic step-by-step process to purchase tax liens online:


Log onto the online tax lien auction website and provide the basic information to register as an online tax lien bidder. Typically, the following information will be required:

  • Name of the person or other legal entity who will own the investment
  • Tax identification number of the investor 
  • Bank account information for the transfer of funds electronically 
  • The deposit amount the investor wishes to transfer is specified and transferred from the investors bank account (the deposit is typically a percentage of the total maximum value of tax liens the investor wishes to buy)

The investor researches each tax lien they are considering buying to ensure that the real estate backing the tax lien has sufficiently greater value than the tax lien. Most or all of the research you want to do can be found online. 


You will have to place an online bid to purchase a tax lien. This process typically involves selecting a tax lien and defining a percentage interest rate you are willing to accept as an annual interest rate on that tax lien. You can bid to buy more tax liens than your deposit will cover and the online system will stop buying tax liens in your name once your limit is reached. 


After the online tax lien auction process is complete you will get a summary of what tax liens you bought and will either be required to electronically pay the balance of what is owed for your tax lien purchases, or get a refund of the unused portion of your deposit


You will not need to wait until the delinquent taxpayer pays the property taxes. With each paid off tax lien, you will receive all your original investment plus interest electronically transferred into your bank account or mailed to you.


If the the tax liens you purchased is not paid off by the delinquent taxpayer, you can get ownership of the property for the cost of the back taxes and any applicable fees. (You may want to hire a tax lien attorney to assist in getting ownership of the property.) 


Tax lien certificates that are not sold during the auction are often available to investors to buy online shortly after the auction using a similar process as used during the auction, but in this case there is no bidding. The first buyer to make an offer to buy a tax lien online gets the lien at the maximum interest rate allowed by law. 

Each local government agency offering the opportunity to buy tax liens online will provide the rules of the tax lien auction in that jurisdiction. These are the basic steps for purchasing and profiting from tax lien certificates online. 

While the provide information is deemed to be accurate, it is not meant to be a comprehensive explanation of the laws governing tax lien sales and redemptions. It is strongly recommended that the bidder review State Laws & Statutes prior to participating in a tax lien sale auction.

By Dana Ash-McGinty

Dana Ash-McGinty is the Principal Broker of ASH | MCGINTY, a Washington, DC Real Estate Brokerage. This real estate maven has 15+ years experience in residential, commercial and land sales in addition to multi-state residential renovation, re-zoning, and condo conversion projects. A sought after real estate authority, she has been featured on CNN and in various real estate and financial publications. Dana is married to the highly esteemed Dr. Dana W. McGinty, a Washington, DC internal medicine physician and medical correspondent. They are often referred to as "The Danas".

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