Tax Lien Sales

Tax lien sales occur when local governments sell the rights to collect unpaid property taxes to investors. If a homeowner doesn’t pay their property taxes, the government auctions off a tax lien, which is a legal claim against the property. Investors buy these liens, effectively paying the overdue taxes. In return, they earn interest on the unpaid amount. If the homeowner doesn’t settle the debt within a specified period, the investor may have the right to initiate foreclosure to eventually own the property. This process provides governments with funds and offers investors potential returns, but involves specific legal and financial risks.