Tax Certificate Auction Terms

In the tax deed/tax lien business you’ll hear a lot of terms bandied about. Take a quick look at the terms list we’ve compiled to familiarize yourself with their meanings…

Folks, you’ll find it’s a lot easier to understand the game if you know what some of the common real estate terms mean. Take your time to get familiar with the list of words you are most likely to come across.

60 day notice: In the tax auction/tax lien business this is the notice you attempt to turn into property owners when you are beginning the process to request ownership of their property’s tax deed. This only applies to certificate states.

Account Numbers: (tax account numbers) These are numbers assigned to each property so the county can keep track of the property for tax purposes.

Appraised Value: What the appraiser thinks the property is worth; in other words the current market value of the property.

Assessed Value: This was the county tax assessor values the property at for tax purposes. This is what they use when calculating property taxes each year.

Certificate State: A state that auctions the tax certificates on properties rather than the tax deeds on a property. The bidder pays the back taxes on a property and takes over the right to hold the certificate on that property and require payment.

Deed State: A state that sells the tax deeds on property that owes back taxes. There is less wait time to move forward than with a certificate state because you are buying the deed rather than the certificate.

Deficiency judgment: This is a judgment against the property owner demanding payment of whatever is left due on a loan or back taxes after their property is foreclosed.

Improvement Value: If the value is zero, that means its just land and there are no improvements. This is typically the value of whatever has been added to the property such as a house.

IRS Liens: When someone doesn’t pay their federal income taxes the IRS can put a tax lien on their property and foreclose on the property is the taxes aren’t caught up. The property is sold at auction to try and recoup the taxes and fees owed to the IRS.

Land Value: is the estimated total price of both the land and any improvements made on it.

Plat Map: is a map dividing an area, town, county or state into parcels of land by ownership.

Promissory Note: a legal contract between a lender and a borrower that states the terms and conditions of the loan and how the loan is to be repaid.

State Statute Books: are put together by the state treasurer and contain all the laws and rules concerning property ownership and sale in the state. This is where you can find information on the state’s tax auction procedures.

Title Company: A business large or small that provides information on other businesses and properties. This is how you find out who to send your notices to and can get more detailed information on properties up for auction by requesting an Ownership and Encumbrances (O&E) Report based on the tax account numbers.