You may be able to get a bargain on some real estate by purchasing it at an Indiana tax sale. Indiana holds public auctions to sell the deeds of properties of delinquent taxpayers. Unless there is a redemption period, the winning bidder obtains rights to the property clear of trusts, tax liens and mortgages. It's important to understand the process of an Indiana tax sale before placing your bid.
Search for Property Listings
Look in a local newspaper or search your county's website for properties listed in upcoming sales. It is not uncommon for a newspaper to omit certain details about the property being sold. For example, a current owner may have a right of redemption that can stall the resale or the remodel of a property after you buy it.
The redemption period allows the original owner to reclaim the property by paying the winning bid amount plus a penalty fee. Contact your county treasurer's office to find out details of the sale.
Set Up an Inspection
Make an appointment with the bank that owns the property and ask to inspect it. Indiana bidders are sometimes unable to look at the interior of a property because it is occupied. In such cases, bidders can get a property at a low price, but are taking a gamble as the interior could be damaged. Unlike regular real estate contracts, once you purchase a tax sale property you cannot back out. What you see is what you get in a property sold through an Indiana tax sale.
Find Out the Home's Value
Contact your county appraiser's office and inquire about the value of the home. This will give you an estimate of fair market value if you decide to resell the property.
Get Your Financing in Place
Select a property that you are interested in purchasing at the tax sale. Call your bank to get approved for financing. Indiana law requires that your bank supply a letter stating your financial limit and approving your bid.
Place a Bid
Start your bid with the minimum price allowed or the amount due in back taxes. Indiana auctions are led by licensed real estate agents. Brokers will announce the terms of the tax sale before bidding begins. In most Indiana counties, you can place multiple bids online. Register online with your county assessor's office.
Submit the Deposit
Provide a good-faith deposit immediately at the close of auction if you are the winning bidder. Indiana requires a 10 percent deposit of the winning amount. In some Indiana counties a representative from your bank needs to be present at the tax sale to certify your check unless you pay cash.
Take Possession of the Property
Arrange for a sheriff to accompany you, if needed, when you take possession of the property. Consider this option if the occupants refuse to vacate after you legally become the new owner. If the residents do not cause problems you can give them a reasonable period of time to move out.
Check with neighbors near the property being sold. They may be able to provide information on the community and the condition of the home.
Note that during a redemption period, you cannot enter the property even if you have won it at the tax sale. You can only enter the property after the period ends and the court gives you permission. If caught trying to enter you could be prosecuted for trespassing.
- Check with neighbors near the property being sold. They may be able to provide information on the community and the condition of the home.
- Note that during a redemption period, you cannot enter the property even if you have won it at the tax sale. You can only enter the property after the period ends and the court gives you permission. If caught trying to enter you could be prosecuted for trespassing.
Lucy Bowles is an avid freelance writer from Indianapolis. She has written for various websites since 2009. As a certified paralegal Bowles has worked in the areas of business, intellectual property and entertainment law. She has a bachelor's degree in history and a minor in legal studies from Indiana University.