Tax Deed Sales – The “Catch”

Tax Deed Sales – The “Catch”


Tax deed sales, as with any other opportunity that seems “too good to be true”, come with a catch – actually several.

If you’re just getting into tax deed sales, you’ve probably heard the following:

  • Properties start at only a few hundred dollars
  • You can buy single family houses and other rentable properties for under $1000
  • You can buy MANY of these properties at each sale
  • When you walk away from the sale with a property, you can immediately resell it for huge profits

There is some truth to each of these statements but they paint an overall picture that’s completely misleading.

The Main Catch

The main catch with tax deed sales is that they almost always involve competitive bidding.  Plain and simple.

It’s true that valuable properties will likely be offered with a minimum bid of only a few thousand dollars, even sometimes only a few hundred dollars, at most large tax deed sales.

However, tax deed sales are not the well-kept secret that some “tax sale gurus” claim.  Many investors know about them, and they will also know about the properties you hope to buy at the sale for pennies.

They will want to buy them too, and the price will rise until it is no longer a bargain.  The closing bid for many properties will be as high, or higher, than a comparable foreclosure available anytime on the MLS.  Auction fever!

This “catch” alone is enough to make tax deed sales almost completely unattractive.  But there are more issues you may not have considered, which make it even LESS attractive.

More Issues to Contend With – Tax Deed Sale Properties

You’ll also find these downsides of purchasing at a tax deed sale:

  • No Inspection – You’ll have to take a look at the property from outside, and hope that there are no major surprises inside!  No inspections are possible.
  • No Marketable Title – You will have to do an additional legal procedure called a “quiet title” before you can resell the property to most investors, who demand title insurance.  This process starts at $500 and can cost thousands depending on the area.  It also takes several additional months, minimum
  • Eviction – These properties aren’t necessarily vacant.  You may have to evict occupants.
  • All Cash – You need all cash the day of the sale, or shortly thereafter
  • Research – To even find the handful of suitable properties to bid on, you need to go through dozens, even hundreds or thousands of others on the list that have little value.

There ARE a couple specialty plays that you can make at a tax deed sale, and profitably buy directly at the sale.  I discuss those in my Tax Sale Opportunities article.

{ 19 comments… read them below or add one }

TONYADICKENS March 3, 2013 at 5:25 pm



admin April 22, 2013 at 3:21 pm

7 dollars.


Earl Robinson jr March 14, 2015 at 10:29 pm

Hello yall how are u doing? my name is Earl Robinson and i would like some of that information. so what book do u have 4 sell. and thank you very much.


michael k limmer March 9, 2013 at 8:17 pm

what happens when no bids on property?


admin April 22, 2013 at 3:20 pm

Varies by state, but it’s generally offered again with some better terms like:

-Shorter wait or ability to get deed immediately
-Reduced price


john gaines March 14, 2013 at 3:33 pm

Your right, you don’t hear the downside of tax liens from the guru’s. Would appreciate straight forward inf. regarding these type of transactions.


Sandra Sanders April 7, 2013 at 2:05 am

Would like to know more


Debbie Thompson May 21, 2013 at 12:09 pm

If you are are truly interested in making money with Tax Sales, you NEED to get Rick Dawson’s, “Go Ahead, Be A DeedGrabber”!! Before I bought this book, I was so sure that he was going to be just like all the other crappy lying ‘Guru’s’ out there that were just out to make a quick buck. WOW, WAS I EVER WRONG!! Rick Dawson is a TRUE Real Estate Tax Sale Investor!!! I am so grateful that I found his book!! Everything in his “Go Ahead, Be A DeedGrabber” ebook is thoroughly explained and written so absolutely everyone can understand it! Within the first couple of months after purchasing his ebook, I had bought and flipped 8 properties! My profits totaled a little over $188,000.00!!! Rick’s DeedGrabbing method is so easy to use that you’ll never go back to investing in Real Estate the old-fashioned way!! I Thank Rick so much for giving me back a life of freedom and happiness again!! Sincerely, Debbie Thompson Hometown Investment Properties


admin May 28, 2013 at 9:48 am

Thanks Debbie! I’m glad you had the kind of success I enjoyed with the program shortly after I got it all figured out.


Laurel Larsen May 28, 2013 at 10:48 pm

Just found out a friend lost his property to tax sale, and was evicted by the new owner. He offered to continue paying rent to purchase, got an agreement, then the new owner renigged on him and had him evicted. I may be facing foreclosure and am just wondering if this is a possibility to earn a better income and keep my house.


admin June 19, 2013 at 2:54 am

It’s certainly a good opportunity to earn income – I can say that.


wm. colqhoun June 19, 2013 at 5:16 am

please send your insiders guide. thank-you


Dionne February 12, 2014 at 11:35 pm

please let me know where else I can find this amazing ebook is it in regular book form


phillip clyburn September 1, 2014 at 6:23 am

can you please send me some more information please.


phillip clyburn September 1, 2014 at 6:27 am

can you please send me some more information please. thank you


S. Mcneil June 7, 2015 at 3:08 pm

I am interested in your book. please give me some additional information. I hear the housing market is going down.


admin August 6, 2015 at 11:36 am

Doesn’t matter if housing market goes up or down, we don’t speculate on prices going up or down. We buy cheap enough to make a profit in any market.


dan August 17, 2015 at 2:20 am

If any of these so-called tax gurus are telling the complete truth even the Rick Dawson guy then why wouldn’t they just keep quiet and make hundreds of dollars every month flipping their own properties they find? This is strange as you all must be aware of how competitive book selling is, these claims about tax lien buying have to be so far fetched that the so called gurus are actually making more selling the books than buying up and flipping properties? I’m just being realistic here folks. That can be said for almost any quick easy money scheme that is being highly promoted through meetings and crash courses we are so quick to go ahead and buy, isn’t it? Maybe I should write an Ebook and explain these get rich schemes why it’s highly speculative and see if I can get paid something? Or has already been done? lol


admin December 10, 2015 at 7:15 am

Dan, if you’re an expert at this, go ahead and write an ebook and “get rich”! If you’re not, it will be noticed quickly.


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