Chapter 34.01 of the Property Tax Code describes the Sheriff Sale Process. A Sheriff Auction, Sheriff Sale, Tax Sale and Tax Auction are all the same think. This process is followed in all counties in the state of Texas. They are an excellent starting place in understanding the Property Tax Foreclosure Sale process! These guidelines are found in the Property Tax Code, Chapeter 34, Section 1 . The following is a very GENERALIZED summary of the Sheriff Tax Sales process provided by the property tax code as it relates to a buyer. Disclaimer: I am not an attorney. If you feel you need a more detailed explanation of the Property Tax Code, I would highly recommend that you contact a property tax attorney.
Sec. 34.01 – Tax Foreclosure Sale of Property
Who conducts the sale – Unless otherwise requested by the foreclosing party, a tax foreclosure property is to be sold by a Sheriff or a Constable in the County where the property is located.
Where is a Tax Sale advertised? – A notice of the upcoming tax sale must be advertised in a local newspaper for three consecutive weeks prior to the sale and the notice must include date, time and location of the sale as well as a brief description of the property to be sold. If there is no local newspaper, the officer will post a notice of the sale in three different public places including the county courthouse.
What happens if the minimum bid is not met? – At the sale, if the minimum bid is not enough to cover the adjudged value, the taxing unit that foreclosed on the property can choose not to sell the property.
What documentation do I receive? – If you purchase a property at a sale, the officer at the sale will prepare a Sheriff’s Deed for the purchaser and mail it to the purchaser once it has been filed.
What rights does a Sheriff’s Deed give me?– This deed gives the purchaser the right to collect rent and use the property during the redemption period.
What makes up the “Minimum Bid”? – Properties are generally not sold for less than the amount that covers the taxes, penalties, interest, cost and other claims for which the foreclosure warrant was issued. This amount is usually referred to as the “Minimum Bid” at most Tax Sales.
Where is the Sheriff Sale held? – Tax Sales must take place at the County Courthouse in which the properties in question are located. A County Commissioner may change the location, but it is rarely the case.
What type of payment is required? – 100% Payment is due when purchasing a property from a tax sale. No financing is available, and obtaining financing after the fact is difficult due to the difficulty of acquiring mortgage insurance on a Sheriff Sale property. There are multiple ways to secure the funding previous to the sale discussed later in the steps of the process, but funding is one of the biggest obstacles for many investors. With extremely few exceptions, payment is expected in full at the time of the sale or within a few hours later, by cashier’s check or by cash.
These are the basic fundamentals of the sales process of all Texas Tax Lien Sales. Further guidelines discussing other aspects of the process are described in Sections 34.015 through 34.08. These sections can be found in the Texas Property Tax Code. Again, if further clarification of the Sheriff Sale Process is needed, you should consult a property tax attorney!
