Excess proceeds - Excess funds generated at the county tax sale after all pre-determined lien holders are satisfied. Depending on the county, excess proceeds can go to the original property owner, the county or the state. You will need to find out from the county who gets any excess proceeds from the sale. For this to work, the excess proceeds must go to the owner.
Determining if excess proceeds are available to you:
· Find out what happens to the excess proceeds from the tax auction.
· If the proceeds go to the county, this eliminates the availability of those proceeds to you.
· If proceeds can be claimed by existing lien holders, then they will be limited or unavailable to the owner.
· If excess proceeds go to the titled owner, they will be available to you after the auction.
· Find out when and how the excess proceeds can be acquired. Get details on the process.
· If there is a standard form you would have to fill out, get a copy.
Start by going to www.johnbeckspropertyvault.com and use the sales calendar to identify upcoming auctions.
Call the county and verify with them the following:
Where do the excess proceeds go? (They must go back to the original property owner for this to work.)
How does the owner collect the excess proceeds?
Does the county clear all other liens before the sale?
Does the county take ownership of the properties before the sale?
If the excess proceeds go to the owner; obtain a list of the tax delinquent properties going to that sale.
Select the properties that you’d like to make an offer on by trying to predict which properties will be the popular
Get the name, address and phone number of the property owner.
Send the owner your offer letter and quit claim deed, and self-addressed, stamped envelope.
You can get a Quit Claim Deed for any state for free at www.vuwriter.com
Click on “Forms”Register with the site.
Click on “Forms” again on the left side once you are logged in.
Select the document you need for the state you need it.
Follow the letter with a phone call no later than one week later to answer any questions that they might have and help close the deal.
Once the deeds come back, if the county does not clear all other liens at the sale, do a title-search on the property. If the county clears all other liens, don’t worry about the title searches.
· Once the title searches have been done, (if needed) send the completed deeds to the county for recording.
· Wait for the auction to come and go.
· After the auction is over, contact the county and go through the process they have already given you on how to claim your excess proceeds.
Choose an exit strategy that works for you and gets you the best profit:Whenever you use the pre-auction acquisition method of obtaining the deed to the property, you will want to know your exit strategy going in. In most cases, you will be redeeming the property by paying the taxes before the auction and then reselling the property for a profit. Here are a few exit strategy options:
1) Redeem the property:
- Pay off the back taxes, get a notice of lien release, and notify whoever is running the auction that it is done.
- Resell the property using whatever method you identify as the best sales method for your business.
2) Don't redeem:
- Let the property sell at the tax auction and collect the excess proceeds.
- Make sure you get the results of the auction to find out what you would be getting.
- Complete the process of applying for the excess proceeds within the time frame required by the county.
- Make sure you know when the county will pay you and follow up if they do not.
3) Sit the fence:
- In some few counties, the redemption period ends AFTER the tax auction.
- In these cases, you can watch the auction and determine if the excess proceeds are sufficient.
- If the excess proceeds are not sufficient, then redeem the property and resell it.
- If the excess proceeds are sufficient, then apply for the proceeds and wait for your check.
· For your pre-auction properties, decide which exit strategies are available in the counties you are working with and decide which one to use for each property.