April 14, 2024

Illuzzi Letter

Envisioning And Creating Your Dream Home

How to Buy Real Estate at Government Auctions

A smart real estate investor looks for bargains in real estate; a diamond in the rough. But trying to find these bargains can be difficult to do. Government auctions and county tax sales are just one way of finding real estate well-below market value. Some of the properties will need some minor repairs, but you can find real estate property for pennies-on-the-dollar. The U.S. Marshals Service (USMS) sells property that the federal government orders to be sold. County governments also sell properties that have failed to pay their property taxes.

The U.S. Marshals Service

The U.S. Marshals Service (USMS) offers a wide variety of property for auction to the public which has been forfeited or ordered sold by federal court order under laws enforced or administered by the United States Department of Justice and its investigative agencies. The U.S. Marshals Service sells diverse assets such as high-end vehicles, collector cars, residential, commercial and agricultural real estate, timeshares, sport fishing vessels, aircraft, artwork, jewelry, financial instruments and much more. Much of this merchandise is sold online in online auctions. They have properties listed all over the country ranging from houses, apartment units, and bare land.

One recent example is a home in Boynton Beach, Florida up for auction. It is a four bedroom house with two bathrooms, a two-car garage, and an in-ground swimming pool. The starting bid for this auction was only $171,800! Comparable homes in the area sell for almost twice that amount! Another example is a gas station and dry cleaning storefront that sold outside of Chicago for $42,400! These auctions were both seized by the federal government for failure to pay taxes.

County Tax Sales

If you fail to pay your county property taxes, by law, the county has the right to seize your property and sell it at government auction to recover their losses. These are known as county tax sales. Anyone can attend these auctions and bid on property. Traditionally, these sales have taken place on the county courthouse steps. But more and more counties are starting to have their auctions online. It is very important when you are considering buying property at county tax sales that you perform your “due diligence.” Due Diligence is the process of investigation, performed by investors, into the details of a potential investment, such as an examination of documents, inspection of the property, and performing a title search on the property. This is imperative as most government auctions sell their property “as-is” and it is up to the buyer to make sure all the details are taken care of before they bid.

Buying property at government auctions can be an excellent way to find a bargain. Remember to do all your research before you buy and you may be rewarded with a property well below market value. You can either fix up the property and sell it, or fix it up and rent it out and receive a steady monthly income.