This post features Pennsylvania Tax Sales Explained, A video posted on YouTube on April 18, 2020.
Pennsylvania Tax Sales Explained
Pennsylvania tax sales are extraordinarily complex. They have 67 counties and they are a deed state. They generally use a premium bid system for their auction.
Four Auctions for Pennsylvania Tax Sales
Pennsylvania has four tax deed auctions and sales throughout the year. The conditions of each auction or sale will change. If you wish to play in this state you will need to know all four. The four different auctions/sales are known as:
Upset Sale
Private Sale
Judicial Sale and
Repository Sale
Besides this, three cities and one county have their own processes. These are Philadelphia, Pittsburgh, Scranton and Allegheny County. The redemption period ranges from 9 months to 2 years, depending on the county. Properties that redeem pay a penalty rate of 10% per year. If the redemption period expires the investor can petition for a tax deed. This can all be VERY confusing, so before you bid, be sure and check the rules in the EXACT location of the sale.
Upset Sale
Upset Sales take place each month of September. These auctions are almost all held on location. The properties sell to the high bidder. Properties sold at the Upset Sales ARE NOT free and clear of any lien, debt, or encumbrances. The winning bidder will have clean up to do. Wayne County, Pennsylvania holds its Upset Sales on www.bid4assets.com .
Private Sale
The Private Sale occurs after the property goes to the Upset Sale but does not sell. Interested buyers need to submit a written bid to the Tax Claim Bureau. Investors submit the bid for the property to the county. If accepted, the investor must place an advertisement in a local newspaper. This is to announce the pending sale of the property. Anyone with objections to the sale can petition the court within 45 days. If there are no objections, the property transfers to the approved buyer. Properties sold in a Private Sale ARE NOT free and clear.
Judicial Sale
Judicial Sales occur in November. Properties listed here are those properties that didn’t sell at the Upset or Private sale. These auctions occur on location. The properties transfer to the winning bidder free and clear of encumbrances. Some government liens and judgments can still survive the sale. Check with a local attorney on a per county basis.
Repository Sale
The Repository Sale consists of properties that did not sell at the Judicial Sale. Pennsylvania counties may offer these properties via premium bid auction or sealed bid. If the county offers the properties at auction, the auctions take place in January. Properties sold by way of the sealed bid process sell on a first come first serve basis, i.e. OTC. Like the Private Sale, interested buyers must submit a sealed bid to the Tax Claim Bureau. If accepted, the investor must place an advertisement in a local newspaper. and similar rules apply for objections as with the private sale.
Tax Sales investing is a niche that has the potential to be insanely profitable.
However, most investors do not have a deep understanding of this investing strategy.
Every state has a unique set of rules and regulations. There are some basic rules you need to understand as to how the process works. Generally, states will fall into one of three categories:
Tax Lien States
Tax Deed States
Hybrid States
Hybrids are states who conduct their tax sales by selling tax deeds with a caveat. The deeds have a redemption period much like a tax lien certificate.
This map provides links to information for every state as well as Washington DC.
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