Purchasing real property is a major commitment and is often a very expensive undertaking. The standard approach involves a 30-year mortgage and years of saving for a down payment. Although some of the rules have changed in recent years, quite a few prospective homeowners find this traditional approach too demanding.
There are alternative means of acquiring real property. County tax lien sales can be a means of acquiring real property, although the process certainly comes with a few challenges. First of all, those hoping to buy at a tax lien sale will need to compete with other aspiring owners.
Financing is not available for tax lien sale purchases, and there are many issues that can prevent someone from eventually becoming the official owner of real property. One concern, in particular, may prevent some people from even pursuing a property listed at a tax lien sale.
The right of redemption complicates the process
Tax lien sales typically only occur after someone has failed to pay property taxes for some time. Even if a tax lien sale occurs, an individual likely still has an opportunity to retain or redeem the property sold to recoup a tax lien debt. Under Arizona state law, the owner on record at the time of the tax lien sale has three years after the sale occurs to redeem the property. Redemption involves paying off both the amounts paid by the tax lien sale purchaser and appropriate attorney’s fees and costs and up to 16% interest per year.
Learning more about the challenges that arise during unique residential real property transactions can help to protect those who aspire to invest in property subject to tax lien sale. Seeking legal guidance is a good way to achieve this goal.