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A tax deed sale extinguishes most liens. For the most part, only liens of record that run with the land, or those held by a municipality or county survive a tax deed sale. A recurrent issue has been whether a tax deed sale extinguishes homeowners or condominium associations' liens or claims.

What are the Three Most Common Types of Deeds?General Warranty Deed.Special Warranty Deed.Quitclaim Deed.Jul 19, 2017

Worthless Property. Sometimes owners stop paying their property taxes because the property is worthless.Foreclosure Risks. When you purchase a tax lien, state statutes limit the amount of time you have to foreclose on the property before the lien expires worthless.Municipal Fines and Costs.Bankruptcy.

Legal Description The seller or the seller's broker will hire an attorney to prepare the real estate deed to ensure that all of the requirements in the creation of a valid deed are met before the seller conveys title to the property, reveals National Paralegal College. All real estate deeds must be in writing.

Generally, after owning a tax certificate for three years, the purchaser can get a tax deed (that is, the purchaser can get ownership of the home). Or, if the state is the purchaser, it may then sell the home after three years elapse from the sale date, and that purchaser will get a tax deed.

The Bottom Line These certificates become profitable in the likely scenario that the homeowner pays their tax bill. While they can offer a generous return, it's important to understand the significant risk included in this type of investing.

The sale allows investors to purchase certificates by paying the tax debt. The sale is conducted in a reverse auction style with participants bidding downward on interest rates starting at 18%. The certificate is awarded to the bidder who will pay the taxes, interest and costs and accept the lowest rate of interest.