5 Steps to Buying Tax Liens Online

There are five steps that you need to follow in order to be a successful tax lien investor whether you investing in tax liens online or in person. But how you follow out these steps is just a little different for the online tax sale. I like to use the acronym “STEPS” to describe these five steps.

The 5 Steps To Buying Good Liens Online Are:

1. Select where you will invest
2. Track down the tax sale information
3. Evaluate the tax sale properties
4. Prepare to bid at the sale
5. Show up and bid!

As I mentioned earlier these are the same five steps that you would use to get ready for any tax sale whether it is an online or live tax sale. However for participating in the online tax liens sales, you have to go about these steps a little differently. So let’s take them one by one and go over what it is you need to do for each step.

Step 1: Select Where You Will Invest

If you want to invest in tax liens online you are limited to the states that have online tax sales. Not every state in the US that sells tax liens has online auctions. Just three years ago, when I first started writing about investing in tax liens online, there were only five states that had tax lien auctions online, today there are seven. They are Arizona, Colorado, Florida, Indiana, Maryland, Louisiana and Nebraska. Even in those states, not all counties have online tax sales. You can find a list of these counties with links to the tax sale websites, and other details about their tax sales in my Buying Tax Liens Online course. The online tax sales are very different in each state, but they do have a few things in common, which brings us to step 2.

Step 2: Track Down The Tax Sale Information

This part is easy for the online tax sales because most if not all of the information you need is usually provided on the online bidding web site. To find out where to go you can call the county tax collector or treasurer or you can go to one of the online tax lien investing platform listed below that conduct many of the online tax sales.

Platforms For Online Tax Lien Auctions:

• www.RealAuction.com
• www.GrantStreetGroup.com
• www.SRI-AuctionsOnline.com
• www.CivicSource.com

Step 3: Evaluate The Tax Sale Properties

These counties make it easy for you to register and bid online. The hardest part of buying tax liens online is doing your due diligence for the tax sale properties. Unless you purchase a tax sale list from a tax sale list provider, or in some cases from the county, you don’t always get to see the list of properties that are in the tax sale. Instead the properties are listed individually or in batches by an id number and you have to click on the property number to get the rest of the information on the property. Some counties do provide a lot of information about the properties on the tax sale web site, but you have to click on each property individually to get the information. They might also provide an excel file with all the properties listed that you can download to your computer, but this list has very little information about the property. This is where buying a detailed or enhanced list, with all of the assessment information for the property can me very helpful.

Step 4: Prepare To Bid At The Tax Sale

You need to register for online tax sales days or in some counties weeks ahead of the actual sale. You register for the tax sale and bid on the properties online. You are not actually bidding on the property, but on the tax lien certificate that is being auctioned. These sales usually require a deposit, and some of them have a non-refundable registration fee. Payment for the liens that you are successful bidding on is required within a day or two of the close of the tax sale for tax sales that use wire transfers as the method of payment. For tax sales that use ACH Debit as the method of payment for tax liens, you usually have to pay the day of the close of the tax sale. For these tax sales, you agree before hand to allow the county treasurer to debit your account for the tax liens that you purchase.

Step 5: Show Up And Bid!

Again this is easy for online tax sales because all you have to do is put your bids into your computer and usually, unlike the live tax sales, you have plenty of time to do it. The online tax sale web sites usually open up at least a couple of weeks before the tax sale is over, giving you plenty of time to bid as long as you register and get your deposit in on time. You do have to keep track of the time though, since the properties are usually separated into batches and a batch will close every hour – you must get your bid in before the batch closing time.

Also many of the online platforms allow you to download an excel file of the tax sale properties and upload your bids all at once instead of putting them in individually. The important thing is to double check your bids before submitting them. If you bid on a property by mistake and you are the successful bidder, there is no taking it back. You will have to purchase that lien or forfeit any successful bids and your deposit, and you will be barred from future tax sales. So just as with live tax sales, it’s important not to have any distractions while you’re bidding.