State and local governments may become owners of real estate either as a result of low-income housing assistance or unpaid taxes.
Some states have agencies that loan money to qualified citizens to purchase homes. If those borrowers default, the agency will foreclose on their home. To identify any such agencies in your state, call your local HUD office. They maintain a wealth of information about local homeowner assistance programs and will be able to direct you to the proper state agencies.
Unpaid state income taxes can result in property seizure and sales, just like with the IRS. If your state has income taxes, contact the revenue department’s enforcement division, usually located in your state capital. They can tell you if anything is currently for sale, identify who handles the sales, and provide you with any resources you can use to keep track of upcoming auctions.
Sales of property to pay for delinquent real estate taxes are another possibility. Call the local office that handles the receipt of such tax payments. It might be called the tax assessor’s office, the tax collector’s office, or the revenue department. Every state is different. Find out everything you can about the procedures leading up to the tax sales, requirements for bidding at the auctions, and any rights the former owners have after the auction. The latter information will be important to you if you buy property from the state after a tax sale auction.
Many times, there will be no bidders at a sale for unpaid real estate taxes. The state or local authority will bid the property in, and will be the owner, just like a bank that has foreclosed. Usually, a different agency handles the real estate after it has been bid in by the government.
Find out what that agency is and who you can contact to see what is in inventory. To discover the responsible authority, call your local tax collector’s office.