Bid-down, premium and rotational bidding
Information only, not investment or legal advice. Sale dates, terms and deadlines change; always confirm with the county before you register or bid.
Two counties can sell the same kind of lien and still give you very different returns, because they run the bidding differently. Here are the methods you'll see most.
Bid-down interest
Bidding starts at the maximum interest rate the law allows and goes down. The bidder willing to accept the lowest rate wins. Busy sales can drive rates very low.
Premium bidding
Bidders pay more than the tax owed. In some places the premium earns no interest and may not be refunded, so a high premium lowers your real return. In others part of it is refunded or earns interest. Read the rules.
Bid-down ownership
Bidders offer to take a smaller share of the property. The lowest share wins. This shows up in a few states.
Rotational and lottery
The county gives each registered bidder a turn, or assigns liens at random, at a fixed rate. It spreads liens across bidders and makes the outcome more about luck than price.
Highest bid for deeds
Deed sales usually use straightforward highest-bid auctions starting at a minimum that covers what's owed. Surplus above that may go to the former owner or other claimants under state law.
How to use this
Before you register, find the bidding method in the county's terms of sale. Then run the numbers: what return do you actually get at the rates or prices this sale usually reaches? Each state page explains its basic method.