Thinking about buying a financially distressed property in a tax sale? These properties can be a fantastic investment, and buying one could allow you to get your hands on a home at far less than market value.
However, tax sale properties aren’t without risks. To safeguard your purchase, you’ll need to buy tax sale insurance. Learn more about our tax sale services in Arizona below.
What You Need To Know About Tax Sales and Title Insurance
So you’ve found a property that’s going up for auction in a tax sale, and you’re excited to pull the trigger. Not so fast! Before you make the purchase, it’s smart to know how tax sales work, as well as why you need title insurance.
What Is a Tax Sale?
All owners must pay property taxes on their properties. In Arizona, property taxes are due in two halves: one payment on October 1st and one on March 1st. If a property owner fails to pay their taxes by November 1st or May 1st, the property becomes subject to tax foreclosure.
Foreclosure can trigger a tax sale. This also opens a right-of-redemption period during which the owner has the chance to pay delinquent taxes, plus interest. If they do so, they keep the property. If they don’t, the property is eligible to be sold at auction.
Arizona Is a Tax Lien State
There are two kinds of tax sales: a tax lien sale and a tax deed sale. Arizona follows the tax lien process.
With a tax lien sale, the liens on the property are auctioned off to the highest bidder. If you buy the property at auction, you then have the right to demand lien collection, plus interest, from the property owner. If the property owner fails to pay, the bidder can have the property foreclosed.
Other states use tax deed sales, in which you bid on the entire property, along with any unpaid taxes.
What Is Title Insurance?
Title insurance is a policy that ensures that nothing in the property’s history can challenge your ownership of that real estate. For instance, you’ll have to pay off delinquent taxes to get the title to the property. With title insurance, someone can’t come back later and try to enforce the lien on the property.
Buying title insurance is akin to eliminating risks. Before you close on a property, the closing attorney will look for defects that could cause problems with the title, such as:
- Incorrect notary acknowledgements
- Easements
- Outstanding liens, judgments, and mortgages
- Deeds, wills, and trusts with improper vesting or incorrect names
With our tax sale services in Arizona, you enjoy these protections:
- Protection from loss because of covered claims against the title, up to the amount of your policy
- Payment of claims against the title
- Payment of legal costs if you need to defend the title against claims
Tax Sale Services in Arizona Can Help You Protect Your Investment
PureTitle offers guaranteed title insurance for tax-distressed properties, which means you’ll have peace of mind when buying a home at auction. We also offer research that includes:
- A full list of persons and addresses for all interested parties
- A state-specific insurable abstract
- Comprehensive Mennonite research
- Mail services to help you track your Mennonite notices
Plus, we help you keep your costs low by eliminating the need for a curator in quiet title auctions. There’s also no need for legal professionals to shell out for people-search software to track interested parties. Whether you’re an investor or an attorney, you’ll love how easy we make the tax sales process.
Get Tax Sale Title Insurance Now
If you need tax sale or tax adjudication insurance, you can’t go wrong with PureTitle. We’ll cover the entire title insurance and research process so you don’t have to.
To learn more about our tax sale services in Arizona, call (504) 300-0520. Speak to us today.
