Various Tax liens are placed on residents who own property in the United States of America. Until the owner of the property clears the outstanding tax liens it becomes impossible to sell of the property. At this point an investor can help the house owner to clear of the outstanding tax liabilities and take possession of the property. There are fair chances that a property won in Government tax foreclosures can be sold at a better price in better market conditions.
In the age old cliche PITI (Principal, Interest, Taxes and Insurance), the "T" holds as much significance as the P and the second "I". Whether you own a residential property for personal use or a commercial piece of real estate, the Government of the United States has laws at the federal and the state level. We all know that in these gloomy economic scenarios, homeowners are defaulting on mortgage payments and the insurance companies have no power to save these desperate homeowners. The Internal Revenue Service better known as the IRS has the authority to record the tax lien against a residential or a commercial property. However the procedure to record the taxes will vary in different states.
The IRS has a very well structured procedure by which it attaches the property of the defaulter. After accessing the tax liability the IRS will send out a notice to the defaulter outlining his tax outstanding to the Government. Many homeowners make the mistake of neglecting this notice and this is what spells doom for them. An IRS notice should be treated with utmost sincerity and a meticulous reply should be given to them. If the defaulter at the point of time of receiving the notice is in a good financial health, it is better to pay of the dues. If that is not the case, it will make sense to consult an attorney and file a suitable reply to the Department. The problem starts if the defaulter fails to give a reply within 10 days of the IRS notification. This is considered as a sign that the homeowner is not interested to pay the taxes and the property is then put up on the tax foreclosure auction list. This is a point of no return because after the property is listed it will be auctioned off to the highest bidders. The tax foreclosure auctions are held at a county level but in some cases the state may also put up notices for selling the properties. Many investors dealing in real estate are interested in buying at Government auctions because properties are available at good rates.
It is always advisable that homeowners should clear off their dues to the Government to avoid any complications. In the present market scenario, there may be genuine causes for not paying the taxes. The help of an attorney should always be taken because they are the experts at the job. A Tax foreclosure is a sign of weak financial state of the homeowner and in all cases it should be avoided.
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