Entrust Homebuyers | Real Estate Solutions | Servicing Tennessee

Understanding the Delinquent Property Tax Auction Process in Tennessee

By Ben DuBose

Sometimes homeowners in challenging financial situations ask us, “How does a delinquent property tax auction work?” So, here are the top answers to what happens before, during, and after the auction process in Davidson County, Tennessee.

Note: This blog is a follow-up to my article covering the property tax collection processes in Tennessee. To learn how to keep your home from going to auction, read the post: I’m Behind on My Property Taxes…

Before Your Property Goes to Auction

The due date arrived. Your property taxes reached delinquent status and got turned over to the county for collection. The Clerk and Master’s Office will then set a date to sell your property at auction to the highest bidder. 

If you want to keep your home (and have the money to pay), you can save your property from auction by following these essential steps:

The Delinquent Property Tax Auction Schedule

Around May 1 in most larger Tennessee counties, the Clerk and Master will have the list of properties scheduled to go sold to auction that year. Dates are not assigned to each property yet, but you can find out if your property is on the list by calling the Clerk and Master’s office.

The first auction date is usually in June. For smaller counties, there may just be one auction in the fall for all of the properties. Auctions must be advertised publicly, and the exact list of properties becomes available at least two weeks before the auction date, and sometimes longer. In Middle Tennessee, the advertisements typically show up in the Nashville Ledger newspaper. In Davidson County, the list and auction dates are on Chancery Clerk and Master’s Office website here.

On auction day, lot of investors or house flippers show up hoping to buy delinquent tax properties at a deep discount. Properties are auctioned off in alphabetical order on the day they are scheduled for sale. 

You can actually reclaim your property that day until it sells by paying the total amount owed at the Clerk & Master’s house with cash or a cashier’s check. 

I’ve seen someone stand up at the auction when their property was called to start the bidding and ask how to pay their delinquent taxes right away. The auctioneer said he would move their property to the end of the list to give the individual time to run upstairs, pay their taxes, and bring the proof of payment.

After Your Property is Sold at Auction

So what happens if your property is sold at the auction?

Thankfully, Tennessee law gives property owners up to 12 months after the auction sale to “redeem” the property. The process is long and complex and expensive, but all hope is not lost. Here’s how to get your property back.

How to Redeem a Delinquent Property Tax Home in Tennessee

If you’ve lost your property at a tax sale, you can still regain ownership. The redemption process in Tennessee is very complicated, but some homeowners have succeeded in repurchasing their homes. 

For example, if your delinquent taxes and penalties and interest total $4,000 at the time of the auction, and the highest bidder offers $100,000 for your property at auction, the amount to redeem your property at the end of 12 months would be approximately $4,000 + $3,000 (3% commission of $100K) + $12,000 (12% annually of $100K). 

Again, we’ve seen some people do it, but it is costly. It usually takes someone receiving a windfall of money to redeem a delinquent tax property.

Next Steps to Save Your Delinquent Property Tax Home in Tennessee

So, what can you do if your property taxes are delinquent? First, realize this is serious and take action now! 

Second, decide if you want to manage the process independently or benefit from some expert support, like our team at Entrust Homebuyers. 

If you want help, there is no reason to feel discouraged or lose your property at auction. Call us today at 615-338-5578, or contact us now.

We’ve purchased dozens of properties from families who would have otherwise lost their homes at auction. If you want, we can make you a Fair Cash Offer on your property this week and then give you the time to find another place to live. We are here to help, regardless of whether we buy your property or not. 

This article is not legal advice.

 

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