Preparation is the Key to Success in any Real Estate Auction or Tax Lien Auction

 If you haven’t been to an auction before, you should absolutely attend one to get a feel for its action and pacing—a dry run before you actually start putting your own hard earned cash out.  It doesn’t necessarily have to be a tax lien auction just a well-attended public auction.  


Auctions are purposely designed to get the best price possible for the seller (not the buyer).  Although tax certificate auctions are not quite as high-pressured as other types of auctions (REO, automobiles, etc) they still have many things going for them:

  • A high, overall excitement level
  • Your competitors sitting in the same room as you
  • The marketing concept of ‘scarcity’ – limited time and availability of a product

I remember my first auction.  It was years ago when I was attending a certificate exam.  During the break, I happened to walk by a large real estate auction.  I took a seat and immediately felt the adrenaline rush—ready to buy anything—the properties just looked so good and with everyone else bidding, it was hard to jump into the fray.  Luckily, I didn’t have a certified check with me or I would be the proud owner of a couple REO properties.

Live, open-outcry tax lien auctions are normally very well attended.  Those bidding fall into three categories:

  • Large, corporate tax lien buyers looking to buy as much as they can
  • Local, experienced investors looking for bargains not bought by the corporate buyers
  • Newbies looking for one or two properties but largely shutout by the two characters above

If you fall into the last category as a newbie—don’t worry!  Preparation for the auction goes a long way as long as you do your homework on what to expect.  Here are the steps I recommend to make your auction a success:

  1. Get the latest copy of the entire list of delinquent tax lien properties. 
  2. Bring the list with you and highlight the liens you are interested in and have done your tax lien due diligence on.
  3. Make sure the list is very legible and bring a couple pens to cross out liens that were removed just prior to the sale so you don’t lose your place when the auction starts.
  4. Read the rules of the auction carefully—know when you must register, what type of funds to they take, how the auction is handled, what order will the sale go?
  5. Attend the practice auction—most auctioneers will spend twenty minutes or so at the very beginning to show how he plans to go thru the properties.