Overbids

Overbids (also known as excess bids) are the amounts of money bid by buyers of tax deeds over and above the opening amount (or the value of your tax debt to the County). If your County uses this method to sell tax deeds then there is a very high chance that if you are unable to pay your tax debt back to the County before your redemption period expires then you will be entitled to the proceeds of the sale that is over and above your tax debt and any penalties.

Here is a simplified example:

• Joe Smith owes the County $23,000 tax.
• When the tax deed for his property is put up for auction bidding will start at $23,000 (opening bid).
• This tax deed sells for $350,000 (closing bid). The buyer of the deed now owns it.
• There is a redemption period of 6 months and Joe Smith is unable to pay the $23,000 so the buyer of Joe's tax deed now owns the property.
• Joe now has a period of time (generally 90 days after the redemption period has finished) to go to the Tax Collector's office and claim the overbid (being the difference between the opening bid of $23,000 and closing bid of $350,000), this being $327,000!

Currently in the States there are now scammers out there finding people who have overbids. They are coming to you and telling you some story that they know a way to get you some money from the proceeds of the sale of your tax deed! They will get you to sign a form that allows them to collect the funds on your behalf and cut a deal with you....these deals are anything from 5% to 50%!!
The people asking for 5% are probably deserving of their cut as they generally have recouped you a fair amount of money, the ones that are trying to get more than 10% are just outright scammers, taking advantage of you when you are already in an awful situation.

Please do not sign over the right to collect your money to some stranger as they could actually take all of it and you don't ever see them again, this being the worse case scenario. If you can't collect it yourself ask someone you trust to go get it. If you are not sure if you are eligible, then ring your County Office and ask.

Any overbids that are not claimed for go back to the County for use by them.

Over the next months I am hoping to develop this site to be a useful resource to help stop the scammers taking unsuspecting folks last dollars from them. I intend to provide lists of counties who use the over bid auction to sell their tax deeds. I do know already that California is a hot target for this practice and know of someone who took $70,000 off a property owner for simply going to the County Office and collecting his money! When I was told this story, the person said and "I laughed all the way to the bank". I did not find it at all funny and I am sure you don't either.