Investing in tax lien certificates can be a lucrative business practice but there are pitfalls. One of these is the competing tax lien.

If the property owner has defaulted on taxes to a degree that has resulted in a tax lien from one government agency, often the county government in which the property is located, it may well be that there are other creditors that hold the property as collateral or have power of seizure.

If there are other lien holders this does not necessarily mean that you should not purchase the tax lien certificate. Liens are usually given chronological priority. That is, the first individual or entity to impose a lien is the first to be paid when the property is sold. Before purchasing or bidding on a tax lien certificate it is important that you do your homework.

Many counties provide a lien search facility and there are also Internet based lien search facilities that you should take advantage of before committing to the purchase of a tax lien certificate. If you do find other liens against the property be sure the lien you are considering purchasing will be paid.

Also beware of the Internal Revenue Service. If the IRS has a lien against the property it may take precedence over other liens. Contact your local IRS office for more information on this matter.

Tagged with: • • •

Filed under: Investing in Tax Liens

Like this post? Subscribe to my RSS feed and get loads more!

Possibly related posts

Related Entries

  • Why Invest in Tax Lien Certificates? - Tweet If you are interested in low risk profits, and who isn’t, you may want to invest in tax lien certificates. But what are they and what makes these certificates so financially attractive? A tax lien certificate may be issued by a government authority, usually the county, when a property owner has fallen behind on tax payments. As
  • Tax Liens - Tweet When a person does not pay their taxes, there are a number of repercussions that may come their way. Most of these repercussions are not at all favorable and can infringe quite intimately on a person’s life. One of the most popular tactics used by revenue services that do not receive the taxes
  • Notices of Tax Liens - Tweet Many people live in fear of creditors and other types of bill collectors. Sometimes people are worried that they will not be able to pay their debts off quickly enough and will become subjected to tax liens. Tax liens are put on individual’s properties when they either refuse to pay or cannot pay
  • Tax Liens and Credit Ratings - Tweet Sometimes people are curious to learn how tax liens and credit ratings are related, and may wonder if they are even related at all. Many people, especially those who have tax liens against them, may not like to know that tax liens and credit ratings are both capable of influencing opportunities being made available
  • Look Out for Tax Liens - Tweet There are a number of ways in which people can look out for tax liens. Not only can tax liens impede on the life of the individual that harbors them initially, but they can also infringe upon the lives of people unconnected to the original debt. This is because tax liens on real