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Glossary

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"A" sale

The first tax lien sale for tax delinquent properties in Indiana is known as the "A" sale.

absentee bid

(also, see sealed bid or mail-in bid) An absentee bid is used by an investor who is not able to physically attend the auction. An absentee bid is generally mailed into or dropped off at the county office in a sealed envelope. The bid usually includes a bid registration form and payment, for either the deposit amount or the full amount of the bid. The money is returned to unsuccessful absentee bidders.

adjourn sale

Tax lien certificates that remain unsold after Indiana's primary June sale are offered again through "adjourn sales".

appraiser

(also, see assessor) Among other duties, the property appraiser is responsible for valuating improved and vacant land and helping to establish the land's market value.

assessed value

A dollar value assigned to improved and vacant land for the purpose of assessing taxes.

assessment date

The day of the assessment year on which property is to be assessed.

assessor

(also, see appraiser) Among other duties, the property assessor is responsible for valuating improved and vacant land and helping to establish the land's market value.

assessor record

A document created by a property assessor that contains various data on the value of a property.

assignment purchase

An assignment purhcase occurs when an investor purchases a tax lien certificate held by a government or by another investor.

auditor

In Indiana, the auditor is the official who typically conducts tax lien sales.

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"B" sale

Subsequent tax lien sales in Indiana are known as "B" sales, These sales may be held by some counties to sell tax lien certificates that did not sell at the "A" sale.

bidding increment

For a premium bidding auction, the bidding increment is the minimum amount that the current bid may be raised by another bidder. For a bid down interest or a bid down percentage of ownership auction, the bidding increment is the minimum percentage value that the current interest rate may be bid down.

bid down interest auction

In a bid down interest auction, the tax lien amount stays the same, and the interest rate earned on a tax lien certificate is bid down instead. At a typical bid down interest auction, the current interest rate must be bid down at least 0.25%.

bid-down percentage of ownership

In a bid down percentage of ownership auction, the tax lien amount stays the same, and the percentage of property ownership is bid down from 100%. The bidder who is willing to share the lowest percentage of ownership with the property owner gets the tax lien certificate. Sharing ownership with the property owner only comes into play if the tax lien is not redeemed.

borough

An Alaskan government entity that is very similar to a county in other states. There are 18 boroughs in Alaska.

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"C" sale
Some Indiana counties hold "C" sales throughout the year in an attempt to sell tax lien certificates that have been offered in at least two previous tax liens sales without success. All properties offered at "C" sales have been "struck off" to the county.

certificate of purchase

(also, see tax lien certificate) A document delivered to the tax lien investor that acts as proof of purchase. The certificate generally contains the face value (winning bid amount) and the interest rate being earned during the redemption period.

clerk of the court

Among other duties, the clerk of the court often conducts tax lien and tax deed sales in some states, including Florida and North Carolina.

Commissioner of State Lands

The Alabama Commissioner of State Lands is responsible for scheduling tax sales in all Alabama counties.

constable

Similar to a sheriff, a constable conducts redeemable tax deed sales in some Georgia counties.

 

county-held certificates
County-held certificates are tax lien certificates that have been "struck off" to the county. These certificates then usually become available to outside inverstors "over the counter".

county-held tax deeds

County-held tax deeds are tax deeds that have been "struck off" to the county. These tax deeds then usually become available to outside inverstors "over the counter".

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delinquent tax list
A delinquent tax list is typically released publicly by a government entity in an effort to collect delinquent property taxes from property owners. This list is often published on government Web sites and also in local newspapers. Appearing on the delinquent tax list is usually the final step before a tax lien is placed on a property.

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encumbrance

Encumbrance is legal technical terminology for anything that affects or limits the title of a property, such as mortgages, leases, easements, liens, or restrictions.

ex-officio tax collector

In Louisiana, the ex-officio tax collector is the sheriff who typically conducts redeemable tax deed sales in the parishes.

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federal discount rate

The discounted interest rate offered by the Federal Reserve to eligible commercial banks. In Colorado, the current federal discount rate is added to 9% to establish the amount of interest earned on tax lien certificates.

first position lien

The highest priority lien. In most states, a property tax lien becomes the first position lien meaning that it must be paid before any other liens and mortgages.

flat penalty

A flat penalty is essentially a "late fee" that is typically assessed on and added to the total redeemable amount of a tax lien certificate or a redeemable tax deed immediately after the sale. The flat penalty rate is established at the state level and will apply to all counties or other municipalities. Some states use a flat penalty on top of or instead of simple accumulating interest to penalize delinquent taxpayers and reward tax lien/tax deed holders.

forfeited lands

Forfeited lands are properties that have been lost by their prospective owners and deeded to the county, municipality or state.

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GIS viewer
A GIS (Geographic Information System) viewer is an interactive mapping tool that is very useful for researching a property and/or location. Some GIS viewer are more robust than others and they may include aerial photography, zooming capabilities, search capabilities, housing sale data, and various other data about the area or city. Many GIS viewers are also integrated with property records that allow users to launch a GIS map from the property record, or to launch the corresponding property record by clicking a parcel in the GIS map.

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judicial foreclosure

A property foreclosure processed through the courts. In states that hold tax deed sales, a judicial foreclosure is typically initiated by a county official or department.

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land available for taxes

"Land available for taxes" is another term for over-the-counter tax deeds. This term is often used in Florida.

legal description

A property's legal description is used to describe the location of a property and generally appears on all legal documents concerning the property, including the land deed. A legal description usually contains information such as its location (city, county, tract number), its use (residential, commercial), its owners, and various other information that help define the property.

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mail-in bid

(also, see sealed bid or absentee bid) A mail-in bid is used by an investor who is not able to physically attend the auction. A mail-in bid is generally mailed into the county office in a sealed envelope. The bid usually includes a bid registration form and payment, for either the deposit amount or the full amount of the bid. The money is returned to unsuccessful absentee bidders.

market value

The market value of a property is a stated opinion of a governmental or private appraiser (or assessor) regarding the current worth of the property.

minimum bid

The minimum bid is the starting bid for a tax lien or tax deed when the certificate is placed on the auction block during a premium bidding auction.

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non-judicial foreclosure
Non-judicial foreclosures are processed without court intervention. The requirements for non-judicial foreclosures are established in state statutes/legislation.

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"overbid" amount

(also, see "premium" amount) The dollar amount over the minimum bid price that a winning bidder pays for a tax deed or a tax lien certficate in a premium bidding auction.


"over-the-counter"
"Over-the-counter" is a term given to tax deeds or tax lien certificates that are available to interested investors on a first-come, first-serve basis. Over-the-counter tax deeds or tax lien certificates can either be purchased online, by mail, or in person.

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parcel map
A basic drawing of a land parcel. Parcel maps are typically maintained at a variety of scales, and can be either very precise or very rough.

parcel number/ID

A legal identification number for a property.

parish

A unit of government in Louisiana which operates similarly to counties in other US states.

per annum

A Latin phrase for "annually". "Per annum" is often used when speaking of interest rates (such as, 12 percent per annum).

"premium" amount

(also, see "overbid" amount) The dollar amount over the minimum bid price that a winning bidder pays for a tax deed or a tax lien certficate in a premium bidding auction.

premium bidding auction

Premium bidding is typically what you will find at a traditional "public outcry" auction. Bidding starts at the established "minimum bid" amount. Bidding will continue until no other bidder is willing to go any higher than the current bid.

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quiet-title action

An action to quiet title is a lawsuit filed to establish ownership of property and to prevent any subsequent claim to the property.

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random bidding auction

(also, see round-robin auction and sports draft style auction) In rotational or random bidding, the first bidder is usually selected at random, and that bidder has the opportunity to purchase the first tax lien on the auction block. If "bidder #1" decides to purchase that tax lien, "bidder #2" has the opportunity to purchase the second tax lien on the auction block. If "bidder #1" passes on the opportunity to purchase the first tax lien on the auction block, that opportunity is passed on to "bidder #2". Bidding continues in this fashion until all available tax liens are sold.

redeemable tax deed

Like the name implies, a redeemable tax deed can be redeemed by the original property owner, even after a tax deed is sold to a winning bidder at an auction. Like tax lien certificates, redeemable tax deeds earn interest for the tax deed holder.

redemption period

The redemption period for a tax lien certificate or a redeemable tax deed typically starts at the time of the first attempted or successful sale and ends at the time when the holder of the tax lien certificates or tax deed can legally begin the foreclosure process. The redemption period varies by state, and sometimes by the type of property.

rotational bidding auction

See random bidding auction.

round-robin auction

See random bidding auction.

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scavenger sale

A biennial tax sale held in Cook County, Illinois that offers tax liens with delinquencies of two or more years. 

sealed bid

See mail-in bid.

sheriff sales

Some states use the sheriff's department to conduct tax deed sales. These sales are typically referred to as "sheriff sales".

simple interest

An investor typically earns simple interest while holding a tax lien certificate or a redeemable tax deed. Simple interest can be calculated by multiplying the tax lien amount by the number of periods by the interest rate.

sports draft style auction

See random bidding auction.

struck-off property

A "struck-off" property is a property that has been deeded to a municipality, a county, or state. "Struck-off" properties can then be offered at a public auction or "over-the-counter".

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tax deed

Tax deeds may be sold to interest investors if the property owner is delinquent on their property taxes.

tax lien

By buying a tax lien, the real estate investor is essentially paying the property taxes for the property owner. The investor pays this money directly to the county office and has no interaction with the property owner. Starting from the date of the tax lien purchase, the investor can earn a fixed interest rate or flat penalty on the tax lien "certificate".

tax lien certificate

(also, see certificate of purchase) A document delivered to the tax lien investor that acts as proof of purchase. The certificate generally contains the face value (winning bid amount) and the interest rate being earned during the redemption period.

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upset bidding

Upset bidding is a process used by some states in which other investors (including the former property owner) have ten days after the auction to upset the bid. An upset bid must exceed the original bid by a certain percentage or value. All monies are returned to the investor whose bid has been upset.