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- 1). Purchase local newspapers and read the delinquent tax section. Federal and state governments list unpaid taxes in the newspaper for several weeks. After running the ads, the property is generally auctioned off for the amount of the tax certificate. For example, in Alabama, tax lien auctions are held each year in May.
- 2). Go to the local courthouse and request a list of the tax lien certificates. The local treasurer or tax office receives the liens. Ask the clerk for a list of the real property along with the dates it is set for auction. Also, obtain specific information regarding the registration process for bidding on property.
- 3). Receive a pre-approval letter for the funds. When buying property at a tax certificate auction, most states require a down payment of 10 percent the date of the auction, and the remaining payment is generally due within 30 days. If you are paying cash, carry a proof-of-funds letter with you from the bank along with a form of photo identification.
- 4). Bid on the real property you want to purchase the tax certificate for. The bidding is done in a typical auction format. The auctioneer provides the information regarding the property and starts the bidding. Bidding continues until the property is sold to the person willing to pay the largest amount.
- 5). Visit the attorney's office who handles the sale after the auction. The clerk provides you with the paperwork needed to obtain the certificate after payment is received. An attorney provides you with the documents after you make the final payment at the closing of the sale.
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