Tax Defaulted Auction Course Now Online at Explains How Bidding On Tax Lien Certificates Varies From State To State

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Each state has property tax defaulted auctions, but how those sales are handled vary from state to state. Ted Thomas offers a course for beginning investors and includes advanced topics to help learners master how to use this alternative strategy on his website at


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It’s important that you, as a tax lien certificate buyer, understand these auctions and what you are getting into.

It is vital that savvy investors understand the auction rules in each state before investing. While all 50 states conduct past -due tax sale auctions, the states that sell tax lien certificates auction bidding processes vary from state to state. Tax defaulted bidding expert Ted Thomas, offers a course for beginners and includes advanced topics that help investors master how to use this alternative investment strategy on his website at

“It’s important that you, as a tax lien certificate buyer, understand these auctions and what you are getting into. All bidders have to follow the bidding requirements established by the state statutes and county auction rules.”

Bidding up the base amount of the certificate is a tax lien auction where buyers bid on the certificate and can drive the price up using an overbid process. The eventual price paid for the certificate could be more than the past due taxes.

“You need to be careful with this kind of auction. Some counties keep the excess bid amount and some give it back. In the tax lien auctions where the excess bid is kept, that’s money you don’t get back. You get only the base amount back with redemption and the interest.” Mr. Thomas said.

Other tax lien states use a bid down process where you bid down the interest rate of the certificate.

“In this kind of auction, the base price which is the past due tax amount, is fixed. Buyers instead decide what interest rate they are willing to accept. The bids are a reverse auction; the interest rate drops,” Mr. Thomas said. “The interest rate is where you make the profit so if you decide to bid in one of these auctions, decide ahead of time how much you want to make. Don’t get ‘auction fever’ and go below that amount.”

A few states use a percentage of ownership auction system. The percentage of ownership leaves the buyer without title to the property. In short, the bidder gets a percentage of ownership. The property owner keeps the remainder.

“This is also a bid down system. The auction starts and buyers bid down the percentage they are willing to accept,” Mr. Thomas said. “If the taxes are not redeemed, the buyer petitions a court to sell the property. The sale proceeds are split according to the percentage bought at the tax auction.”

Another and somewhat time consuming sale is used in a very few states. The random selection system has all bidders put into a computer generated system. A property is announced and a buyer’s name is drawn. The buyer then may buy the certificate or pass. If the certificate is passed, another buyer is pulled. This continues until the tax certificate is sold or all the names have been drawn.

Tax defaulted bidding expert Ted Thomas offers a series of instructional materials for investors and entrepreneurs to learn more about investing in tax lien certificate and tax deeds. Don’t miss his must-see video, “Truth About Tax Liens Certificate” at his website

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