What tax delinquent property sales are and how they work in Alabama
When a property owner stops paying property taxes in Alabama, the county eventually sells the property to recover the unpaid taxes. This is called a tax delinquent or tax foreclosure sale. You can bid on these properties at a public auction, usually held by the county tax assessor or sheriff's office. If you win the bid, you pay the back taxes, penalties, and auction costs — not the full market value of the property.
The process moves in stages. First, the property owner receives notices and has time to pay (this period varies by county). If they don't pay, the county publishes a notice of sale. Then the auction happens, typically at the county courthouse. After you buy it, there is usually a redemption period during which the original owner can reclaim the property by paying you back what you paid plus interest. Only after that period ends do you get a clear deed.
The appeal of tax sales is the price — you might buy a house worth $150,000 for $8,000 in back taxes and costs. The risk is that you don't get the property when ready, the building may need major repairs, and the title might have liens or other claims against it.
Key Takeaways
- Alabama counties hold tax delinquent sales at the courthouse, usually once or twice a year, and you bid on properties with unpaid taxes.
- You must pay the full winning bid amount at the sale, typically by cashier's check or money order the same day.
- The original owner has a redemption period (usually one to three years depending on the county) to reclaim the property by paying you back your bid plus interest.
- You should research the property's title, liens, and condition before bidding, because you buy the property as-is and may inherit existing debts against it.
- Each Alabama county runs its own tax sale process, so you need to contact the specific county tax assessor or sheriff's office for dates, rules, and property lists.
Finding tax delinquent properties and sale dates in your county
Each Alabama county publishes a list of properties headed for tax sale. Contact your county tax assessor's office or the sheriff's office — they handle the sale and can tell you when the next auction is scheduled. Some counties post lists online; others require you to visit in person or call. The sale date is usually published in a local newspaper as well, often 30 to 60 days before the auction.
Once you have the property list, you can research each parcel. Visit the property in person to see its condition. Check the county deed records (usually at the courthouse or online through the county clerk) to see who owns it, what liens are recorded against it, and whether there are unpaid utility bills or code violations. A title search company can do this work for you, though there is a fee. Do not skip this step — a cheap property can become expensive if you inherit a $40,000 lien or discover the roof is collapsing.
Some counties allow you to inspect properties before the sale; others do not. Ask the tax assessor whether you can enter the building. If you cannot, photograph the exterior and ask neighbors about the property's history.
Understanding redemption periods and when you actually own the property
In Alabama, the original owner has a right to redeem the property after you buy it. This means they can reclaim it by paying you the full amount you bid plus interest. The redemption period varies by county — it is typically one year for residential property and three years for agricultural land, though some counties use different timelines. During this period, you own a certificate of sale, not the deed.
If the original owner redeems, you get your money back plus the interest rate set by Alabama law (usually around 12 percent per year, but confirm with your county). If they do not redeem before the important date, you can explore for a deed from the county. The deed is what gives you legal ownership and the right to occupy, rent, or sell the property.
This redemption period is important because it means you cannot when ready move into the property or make major improvements. You also cannot sell it until the redemption period ends and you hold the deed. Some investors see this as a drawback; others use the time to plan renovations or arrange financing.
Preparing to bid and understanding payment requirements
Before you bid, decide your maximum offer. Research comparable sales in the area to understand what the property might be worth after repairs. Subtract the estimated cost of repairs, your holding costs during the redemption period, and your profit margin. That number is your bid limit — do not exceed it just because you are caught up in the auction.
You must be prepared to pay when ready after you win. Most Alabama counties require payment by cashier's check or money order the same day as the sale, or within one to three business days. Bring a checkbook or arrange financing beforehand. If you cannot pay, you forfeit the property and may lose any deposit you made to register as a bidder.
Some counties require a registration fee or deposit to bid — typically $100 to $500. This is held as security and returned if you do not win, or applied to your purchase if you do. Ask the tax assessor or sheriff's office about their specific requirements before the sale date.
Title issues and liens you may inherit
When you buy a tax delinquent property, you take it subject to certain claims. Federal tax liens (if the IRS has a claim against the property) survive the sale, meaning you could owe federal taxes even after you buy it. Some local liens, like code enforcement liens or utility liens, may also transfer to you. This is why the title search before bidding is critical.
The property is sold free of the original owner's mortgage — the lender's claim is wiped out by the tax sale. However, you are responsible for any property taxes that come due after you buy it. If you do not pay those taxes, the county can start another tax sale process against you.
Ask the county tax assessor whether there are any federal tax liens, code violations, or other encumbrances on the property before you bid. Some counties provide this information on their property lists; others require you to ask. If you discover a lien after you buy, you may be able to challenge it or negotiate with the lien holder, but it is easier to know beforehand.
What happens if you win the bid and the property does not sell
If no one bids on a property at the public auction, the county may offer it for sale at a reduced price or hold it for a second sale. Some counties sell properties that did not sell at auction to the state or to a land bank. The rules vary by county, so ask what happens to unsold properties in your area.
If you are interested in a property that did not sell at auction, contact the tax assessor to see whether it is available for purchase outside the auction process. You may be able to negotiate a lower price or arrange a payment plan, though this is not may provide.
Frequently Asked Questions
Do I need a lawyer to buy a tax delinquent property?
You do not need a lawyer to bid at the auction, but many investors hire one to review the title before bidding and to handle the deed transfer after the redemption period ends. A lawyer costs $500 to $2,000 but can catch title problems that cost far more to fix later. At minimum, do your own title search or hire a title company.
Can I get a mortgage to buy a tax delinquent property?
Most traditional lenders will not finance a tax delinquent purchase because the property is sold as-is and you do not get the deed when ready. Some hard money lenders or private investors will finance these deals, but at higher interest rates. You should arrange financing before the auction if you plan to use it.
What if the property has code violations or is in poor condition?
You buy the property as-is, meaning you are responsible for all repairs and code violations. The city or county can require you to fix violations, and you cannot force the previous owner to pay. Budget for inspections and repairs before you bid, and factor those costs into your maximum offer.
How long does it take to get the deed after I win the bid?
After the redemption period ends (usually one to three years), you submit paperwork to the county to receive the deed. This process typically takes a few weeks to a few months depending on the county's workload. You cannot sell or refinance the property until you hold the deed.
Can I bid online or by phone?
Most Alabama counties require you to bid in person at the courthouse auction. Some larger counties have begun offering online bidding, but this is not standard statewide. Contact your county tax assessor to confirm whether online bidding is available in your area.