How to Buy a Tax Lien Sale Property in Hawaii

Tax sales are the best way to pick up discount properties, with each state setting their own schedule for sale dates, times and auction minimum bids. The great state of Hawaii has many foreclosure properties for sale at bargain basement prices, but to secure a property at the lowest possible price, you will have to bid at a tax sale. However, this venue for property acquisition can be tricky and will also require a lot of cold, hard cash. Unlike other states, Hawaii does not participate in a finance program for discount properties. But for the liquid buyer, a tax auction can be an island paradise for residential and commercial property.

Tax sales differ from foreclosures in that the property may be encumbered but, in most cases, does not require a payoff by the winning bidder. Each state varies in the rules and regulations and you may find the pertinent information from each state's tax assessor's website.

The basic guidelines for purchase at a tax auction in Hawaii begins with frequent searches in the major island newspapers for publicized auctions which should be printed at least four weeks before the sale date. Publications for the greater Honolulu area are a good place to start. Unlike most states, Hawaii does not mandate a registration application, but you must show up for the auction as there are no bids taken online.

Credit cards and personal checks are not accepted, and the winning bidder is responsible for payment in full at the time of auction end. The easiest way to do it is to make a cashier's check out to yourself and the overage will be reimbursed to you by the county.

After payment, the county will draft a tax deed to be mailed to the buyer in two to three months. This deed is a written verification that the property was sold "as is" and the county is held blameless for the property condition. However, buyer beware that the original home owner has up to one year to redeem the property, and its advised that the winning bidder refrain from investing into repair or cosmetic work until the redemption period has passed and title has been recorded under new ownership. In most cases, the property will not be redeemed, however, if this be the case, the winning bidder will receive a 12% interest fee accrued during the wait period.

The county has made every effort to ensure that the seized property will be free and clear of any liens, but it cannot always be guaranteed. They make public the state's intention to sell the property at auction, and in most cases, releasing the parcel from liens. However, if a property is still burdened, the winning bidder may contact the lien holders directly to be released from the lien. However, federal liens cannot be removed.