Tax Deed Mistakes – KNOW before you GO if you want to avoid the BIGGEST ONE!

Tax Deed Mistakes can make the difference between a lucrative deal and a financial disaster!!!

Know before you go!!

I cannot say this enough! What mistake am I referring to? The mistake made over and over again at every sale –

Not knowing how much you will owe IN ADDITION to the sale price, is the mistake that most often creates a financial disaster!

Tax Deed Mistakes happen, but this one is so common that I have decided to designate a tab just for this subject! PLEASE, if you are going to bid at a Texas Tax Deed Sale, read this section before you go and follow this advice. It can save you thousands of dollars!

A very common misconception is that, once you pay for a property at a Texas Tax Sale, you have cured all property tax debts. This is most often NOT true and is one of the most misunderstood Tax Deed Mistakes! Purchasing at a tax sale does cure many debts. Previous bank mortgages and liens are wiped clear, as well as the property taxes owed for the years that were specifically listed in the original foreclosure lawsuit that led to the property being sold at a Sheriff Sale, but it does not include any property taxes accrued AFTER the original lawsuit was filed. For example, a typical Texas Tax Deed Sale will advertise their properties listing the following information:

 

“NOTICE OF SHERIFF’S SALE
(REAL ESTATE)
BY VIRTUE OF AN Order of Sale issued out of the Honorable 192nd Judicial District Court on the 29th Day of September, A.D. 2011 in the case of plaintiff DALLAS COUNTY,ET AL, Plaintiff, VERSUS RICKEY ARMSTRONG, Defendant(s), Cause No. TX-08-30990, To me, as sheriff, directed and delivered, I have levied upon this 20th day of October, A.D. 2011, and will between the hours of 10 o’clock A.M. and 4 o’clock P.M., on the 1ST Tuesday in December,
In George Allen Courts Building, 600 Commerce St., Dallas, TX, (Basement Level)Rm G-119
A.D. 2011, it being the 6th day of said month, at the George Allen Court Building @ the corner of Commerce and Houston Street, 600 Commerce St. Dallas, TX 75202, Basement Level, Rm #G-119, beginning at 10:00 AM, Dallas, TX., proceed to sell at public auction to the highest bidder, for cash in hand, all right, title and interest which the aforementioned defendant had on the 29th day of June, A.D. 2009 or at any time thereafter, of, in and to the following described property, to-wit:
PROPERTY ADDRESS: 7217 CHRISTIE, DALLAS, DALLAS COUNTY,TEXAS.ACCT. NO. 00000820816020000; LOT 2 OF THE WOODS, SECOND SECTION SITUATED IN CITY BLOCK 16/8605 IN THE CITY OF DALLAS, DALLAS COUNTY,TEXAS AS SHOWN BY DEED RECORDED IN VOLUME 93078 PAGE 4303 OF THE DEED RECORDS OF DALLAS COUNTY,TEXAS AND MORE COMMONLY ADDRESSED AS 7217 CHRISTIE, DALLAS , DALLAS COUNTY,TEXAS. DALLAS COUNTY: 2004-2008=$994.16, DCCCD: 2004-2008=$375.41, PARKLAND HOSP DISTRICT: 2004-2008=$1,158.70, DCSEF: 2004-2008=$23.14, CITY OF DALLAS: 2004-2008=$3,367.36, DUNCANVILLE ISD: 2004-2008=$7,686.78, CREDITS FROM DATE OF JUDGMENT FOR TAX YEAR 2004=$1,286.00, DALLAS COUNTY: $83.96, PARKLAND HOSP DIST. $104.59, DCCCD: $33.05, DCSEF: $42.24, DUNCANVILLE ISD: $765.81, CITY OF DALLAS: $296.35. Said property being levied on as the property of aforesaid defendant and will be sold to satisfy a judgment amounting to $13,605.55 and 12% interest thereon from 06-29-09 in favor of DALLAS COUNTY, ET AL, and all cost of court amounting to$924.20 and further costs of executing this writ.
GIVEN UNDER MY HAND This 20th day of October, A.D., 2011″ 

In this advertisement, copied from the Daily Commercial Record, I have changed the text color on the most important text for identification. When reading the original advertisement (as everyone SHOULD DO), use this checklist to verify certain pieces of information listed below. It really will help you avoid the most common tax deed mistakes!

  1. Is the suing party a county entity? – (Pink) Designates the parties suing and being sued
    • MAKE CERTAIN the suing party is a county entity (School, hospital, city, etc.). If it is a Homeowner’s Association OR an Individual, this is not a TAX DEED or TAX LIEN sale and all rules regarding the extinguishing of previous liens DO NOT APPLY!
  2. What is the EXACT address of the property being sold? – (Green) Designates the Property Address being sold
  3. What year’s property taxes are being paid with the sale of the property? – (Blue) Dates Covered by Lawsuit!!!!!
    • Remember – if the lawsuit only covers through year 2008, for example, any taxes posted after this date (like 2009 to present) will be due in full following the sale. You are personally responsible for this debt. Check with your local tax office to verify which taxes have not been paid and how much you will owe following the sale. THIS IS CRITICAL!
  4. What is the minimum bid for the auction? – (Red) – approximate minimum bid

The advertisement does provide additional information – all helpful in avoiding tax deed mistakes, but this information is the bare minimum information that should be extracted before you ever consider bidding on a property! You CAN avoid Tax Deed Mistakes; you just have to be meticulous in your research and follow the guidelines suggested!