Does a tax deed wipe out all existing liens on the property?

No. Federal IRS liens and federal agency liens survive tax sales in most states, as does the IRS's 120-day redemption right. Municipal code enforcement liens in Florida also survive. State rules vary widely — always research what survives versus what gets extinguished in the specific state where you're buying.

How do I find out if a property has a federal tax lien before bidding?

Search the county clerk's lien index separately from the recorder's deed index — federal tax liens are filed in a different location in many counties. Also run the owner's name through PACER to catch active bankruptcies. The IRS also maintains a Certificate of Release of Federal Tax Lien database, but that only shows released liens, not active ones.

Is a title search worth it for a small certificate under $2,000?

Usually not for the certificate alone, but if your strategy is to eventually foreclose to a deed, then yes. A $150 abstractor search on a $1,800 certificate that has a $40,000 IRS lien attached is still the right call. The cost of not knowing is much higher than the cost of finding out.

What does it mean if a property has been delinquent for five or more years?

Multiple certificate years are stacked on the property, each accruing separately. In states like Florida, you can acquire all outstanding certificates from the county before filing for a tax deed, but you must factor in the full cost of all outstanding certificates plus application fees, which can total well above the face value of any single certificate. Run the full stack total before assuming the property is cheap.

Can I research a tax lien property entirely online without visiting it?

You can complete the title and lien research online in most counties that have digitized records, but skipping the physical inspection is a real risk. Properties with visible exterior damage, posted demolition orders, or stripped interiors will not show up in any database. Drive the property — you can't make a sound bid on something you haven't seen.

How to Research a Tax Lien Property

Researching a tax lien property means pulling the title chain, calculating the full lien stack, physically inspecting the parcel, and running redemption math — all before you spend a dollar at the sale. Skipping any one of those steps is how investors end up owning a certificate on a landlocked swamp or a property with a federal IRS lien that survives the tax sale. The good news is that most of this work is public record, and a methodical process takes two to four hours per property once you've done it a few times.

Start With the County Assessor and Tax Collector Records

The assessor's parcel number (APN) is your master key. Every other record — deeds, liens, permits, court judgments — connects back to it. Pull the assessor card first. It tells you the legal description, lot size, zoning, assessed value, and whether any exemptions are applied. A homestead exemption signals an owner-occupied property, which statistically redeems more often. A senior or veteran exemption signals the same.

From the tax collector's site, pull the complete tax history. You want to see how many years are delinquent, not just the current certificate amount. A property with four years of unpaid taxes will have a higher redemption bar than one that's one year behind, but it also signals deeper owner distress. Florida's tax collector sites, for example, show every certificate year, the face amount, and the interest rate the certificate sold at.

Pull the Full Lien Stack

The tax certificate is rarely the only encumbrance. You need to know what else is attached to the property because some liens survive a tax deed sale and some don't. The ones that bite hardest:

Federal IRS liens survive tax sales in most states. The IRS has a 120-day right of redemption after a tax deed is issued. If the property has a $60,000 IRS lien and you win a $12,000 deed, you could find yourself defending that lien post-closing.

Municipal code enforcement liens in Florida attach to the property, not the owner, and do not get wiped by the tax deed process. A $45,000 code lien on a house in Broward County is a real scenario — and it becomes your problem the moment you take title.

HOA liens are treated differently by state. In Florida, the HOA gets to claim up to 12 months of back assessments after a tax deed sale. In Illinois, HOA liens typically survive the tax deed entirely.

Search the county recorder's index by APN and by owner name. Pull every recorded document from the last 20 years. Mortgages, judgments, lis pendens filings, mechanic's liens — you want the full picture.

Check for Federal and State Liens Separately

County recorder searches won't always catch federal tax liens. The IRS files those with the county clerk or circuit court depending on the state, and they show up in a separate index. Run the owner's name through the PACER federal court database to spot any active bankruptcies. A property in active Chapter 13 bankruptcy has an automatic stay — bidding on that certificate won't help you, and attempting to enforce it without court relief is a federal violation.

State income tax liens and state agency liens (Medicaid recovery, environmental cleanup) also run in separate indexes. Most state revenue departments publish lien searches online. Budget 30 minutes just for this layer.

Warning: A title search from a local abstractor costs $150–$300 and is worth every dollar on any property where you plan to spend more than $5,000. Abstractors in the county courthouse know the local recording quirks — like a clerk's office that misfiled three years of mechanic's liens under a nonstandard index code — that online searches will miss entirely.

Physically Inspect the Property

Drive the property. This sounds obvious, but a surprising number of investors bid on parcels they've only seen on Google Street View. Street View may be three years old. The house that looked habitable in 2021 may have been stripped of copper, vandalized, or partially demolished by a municipality that billed the estate and recorded a demolition lien.

What you're looking for:

Is there a structure, and is it standing?
Signs of active occupation (curtains, vehicles, fresh trash)
Visible structural damage: roof sag, broken foundation, fire damage
Posted notices from code enforcement or building department
Utility meters present or removed

You cannot enter the property legally before you own it. But you can walk the perimeter, photograph the exterior, and talk to neighbors. Neighbors know things the public record doesn't: whether the owner died six months ago, whether there's a family dispute, whether the property has been flooded repeatedly.

Run the Redemption Math

Tax lien certificates earn interest, but only if the owner redeems. Before you bid, calculate the break-even scenarios. In New Jersey, certificates earn up to 18% on the face amount plus a premium penalty on redemption. In Arizona, the rate is set at auction and can go as low as 0% when competition is high. Know your state's rate structure before the sale, not during it.

The formula is simple: Face amount × interest rate × (months held ÷ 12) = projected return. If you pay $8,000 for a certificate in a state that caps interest at 12% annually and the property redeems in eight months, you earn roughly $640. That's a 8% annualized return — decent, but only if the certificate was clean. A certificate with title problems you didn't catch is worth nothing.

For more state-by-state rate structures and redemption period rules, the Texas tax lien overview at Tax Sale Ninja shows how a single state's rules layer together — useful as a model for reading any state's statutes.

Confirm Ownership and Probate Status

The owner of record on the assessor roll is not always the legal owner. If the owner died without a will and no probate was opened, title is in limbo. The heirs have an interest but no recorded deed. This creates problems when you try to foreclose a tax deed, because you'll need to serve notice on unknown heirs — a process that can add 12–18 months and $3,000–$8,000 in legal fees to your timeline.

Search the county probate court records by the owner's name. If they're deceased, check whether an estate was opened and whether it was closed with a deed recorded to heirs. If no probate exists, price that uncertainty into your bid. Some investors avoid these properties entirely. Others buy them at a steep discount knowing they'll spend time and money clearing title afterward.