There are some stones you must overturn before investing in tax deeds. These stones once discovered and overturned will lead you down a path of successful tax deed investing. While a novel would need to be written here to undertake the task of deciphering the differences among the states and tax deed laws, I can say that there are lien states and deed states and variances among them.
In some states, such as Wisconsin, counties may purchase the tax liens from the cities. This is indeed the case in Milwaukee County. If the tax lien is not redeemed the tax deed is issued to the county where it is quieted and property is conveyed to non profits or listed through Realtors. Other counties in Wisconsin do auction their tax deeds and Wisconsin is a deed state in which some counties do not partake.
These are lien states, which offer purchasing opportunities for tax liens “tax certificates” and tax deeds.
Alabama
Massachusetts
North Carolina
Arizona
Michigan
North Dakota
Colorado
Mississippi
Rhode Island
Connecticut
Missouri
South Carolina
Florida
Montana
South Dakota
Illinois
Nebraska
Tennessee
Indiana
New Hampshire
Vermont
Iowa
New Jersey
West Virginia
Kentucky
New York
Wyoming
Louisiana
North Carolina
District of Columbia
Maryland
North Dakota
Puerto Rico
In most states a description of the auction process and requirements can be found at either the Clerk of Courts Office or Registrar of Deeds Office, at the County level. I always start with a search of the county websites to locate information. Here is an example of the types of information that can be found and where to find it. The linked page contains tax auction information on Oklahoma and Hawaii.
How it works in most Lien States and the municipalities within them:
Tax certificate issued for non payment of taxes, if unredeemed tax deed application is made. After application and redemption of all other outstanding certificates by investor making application, tax deed auction occurs. If no bidder comes forward you will be issued the tax deed.
Another example of variance among lien states is Mississippi, where thousands of tax forfeited lands can be found by searchable database listed with the Secretary of State http://lands.sos.state.ms.us/tfl/index.asp
In states such as Florida, all procedural requirements are mandated by statute and there is little difference between investing in and among different counties. It is due to this that Florida Counties have been able to conduct tax certificate auctions online in the past few years with only 3 hosting companies among the 67 counties. (Statute mandates procedure not contractual interests) So, Grant Street Group, Bid4Assets and Realty Bid are the three top dogs for hosting different county auctions. Only in 2008 has the statute allowed for judicial sales (mortgage foreclosures, tax deed auctions) to be conducted online and the big three are again at each others heals to get the business. As of now, the Counties are still conducting their judicial sales at the court houses across the states. This I believe will be the main stay for a few more years as many smaller counties do not have the funding for site development and online auctions.
As you can see there are stones to find and overturn, but with the right information your tax deed success can be assured.