What Is a Tax Lien Home Sale?

What Is a Tax Lien Home Sale?

A tax lien sale occurs when the rights to collect on an outstanding tax lien is sold to the highest bidder, explains Realtor.com. Instead of purchasing the title to the home, the lien purchaser obtains the debt attached to the house and the right to collect interest on it.

In addition to having the right to collect interest on the outstanding lien balance, lien holders can take possession of the property, states CNN Money. However, as Forbes indicates, lien holders typically have only between five and seven years to collect the lien balance from the time it was issued, since these claims of right have a firm expiration date.