Understand the bidding process before you start bidding online

More and more counties are going online to perform their tax lien sales. Two of the bigger sites that perform these on a counties behalf are http://www.bid4assets.com/help/index.cfm?fuseAction=TaxSale and http://realauction.com/template.cfm?r=LeftMenu/ListCountyauctions.

You will want to make sure you understand how the bidding process works. A lot of the auctions offer auto bidding or proxy bidding. Essentially, auction participants enter their lowest acceptable bid for a certificate. The auction system then checks all other bids and enters a bid on your behalf at a certain % less than the next lowest bidder (proxy bidding). The system stops entering bids for you when your lowest acceptable bid is reached. When a batch ends, each certificate is awarded to the participant with the lowest interest rate bid. A 0% bid will proxy like any other bid.

For instance with realauction.com, valid bids may be entered between 0 and 16% in 1.00% increments. You could end up with a 0% interest rate on your tax lien certificate, but if you want the property, then it might not a bad option if you can foreclose quickly.

Of course, online auctions are a lot more simple and easier than other tax lien auction processes simply because it is online and you can do research and submit a bid from the comfort of your home. It does come with a price. Since there is increased exposure than there is increased competition. You aren't going to get the higher rates that you possibly might get at a live event.

It has also leveled the playing field. In the previous years, the tax sales were dominated by the big buyers or involved a big boys club, because they were the only ones who had the time to attend the tax sale. Now, anyone can do it from home on their computer.

Always remember, like anything in real estate, proper planning and research is essential. some properties are beign sold this way for a reason.

Happy hunting!!