Last Updated on September 8, 2025
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I cringe every time I hear someone say these five words: “On Zillow, it was worth…”
Please don’t make this tax sale mistakes—it can cost you dearly. Let me explain why relying solely on platforms like Zillow for property valuations is a recipe for disaster, especially when investing in tax sales.
The Danger of Surface-Level Research
Platforms like Zillow provide estimates based on automated data, not in-depth analysis. They don’t account for specific property conditions, local market nuances, or other key factors like title issues and outstanding liens. Assuming those estimates are accurate can lead to overpaying and significant financial loss.
I’ve seen far too many investors fall into these Tax Sale Mistakes, ignoring the importance of thorough due diligence. The horror stories are real: people losing their savings because they didn’t take the time to verify the property’s true market value or inspect its condition.
The Two Biggest Tax Sale Mistakes
- Skipping Due Diligence
Failing to research a property properly can lead to discovering costly issues after purchase. This includes structural problems, zoning restrictions, or unpayable liens. Never assume; always verify. - Ignoring the Rules
Each county and state has unique rules governing tax sales. Ignorance isn’t an excuse, and it can lead to losing your investment altogether. Know the timelines, redemption periods, and other specifics before you bid.
Mistake #1: Skipping Due Diligence
To avoid this tax sale mistake, do your homework before you bid. Josh, who attends three tax sales a week, has seen investors lose savings because they bought unseen houses or ignored hidden liens. To avoid this:
- Visit the property – If possible, drive by to make sure the house exists and isn’t burned down. Some bidders didn’t even check if the properties were there.
- Search public records – Look up the deed, tax history and any outstanding liens. Checking title work and ensuring all interested parties were properly notified can help prevent future legal challenges.
- Examine local data – Talk to neighbours, check crime rates and review comparable sales. Automated sites don’t capture these local details.
- Plan your exit strategy – Decide whether you’ll rent, hold or flip. Quiet title actions can take 90 days or more, so factor that into your timeline. For flips, you need to leave enough spread to make repairs and still profit.
Mistake #2: Ignoring the Rules
Every state and county has its own auction rules, redemption periods and bidding procedures. Ignorance is expensive: you could lose your deposit or the property itself. To avoid this tax sale mistake:
- Read the auction instructions – Counties publish bidder guidelines, deposit amounts and required forms.
- Learn redemption periods – Some states allow owners to reclaim their property after the sale by paying the taxes plus penalties. You’ll need to know when (or if) you gain full ownership.
- Understand bidding – Many auctions have both live and online sessions. Local auctions with fewer online bidders generally have less competition, which can lead to better deals.
- Know quiet title rules – If you plan to sell or finance quickly, you may need a quiet title action to clear claims. This process varies by state and can affect your timeline.
Simple How‑To: Preparing for a Tax Sale
The following table summarizes the key tax sale mistakes and how to avoid them. Use it as a quick checklist before attending an auction.
| Mistake | How to Avoid |
| Skipping due diligence | Physically inspect the property, verify its condition, and research title and liens. Review local market data and plan your exit strategy (renting vs. flipping). |
| Ignoring auction rules | Read the county’s instructions on registration, bidding, and deposits. Learn redemption periods and quiet title requirements, and follow all deadlines. |
After covering those basics, here are extra tips from the video:
- Set a maximum bid – The max bid was $22 000 while some properties sold for $93 000. Decide what you’re willing to pay and do not exceed it.
- Avoid bidding wars – Online auctions attract many bidders. Smaller in‑person auctions usually have less competition. Prefer venues where only people in the room can bid.
- Watch for marketing traps – Some counties advertise their auctions widely, which increases competition. Look for less publicized events where you have a better chance to win.
- Check title notifications – Some bidders didn’t check whether lienholders were properly notified. If not, they might challenge your ownership later.
Frequently Asked Questions
A tax sale is an auction where a county sells properties with unpaid taxes. Buyers can purchase the deed (tax deed sale) or a lien (tax lien sale) and may gain ownership or earn interest when the owner pays back the taxes.
Zillow’s figures are automated estimates that don’t consider the property’s condition, title issues or local market quirks; trusting these numbers can lead to overbidding.
Visit the county recorder or assessor’s office (many have online databases). Look up the deed, mortgages and any tax or mechanic’s liens. You might also order a preliminary title report through a local title company.
If your state uses tax deeds, you often need a quiet title action to clear any claims and make it easier to sell or finance the property. Quiet title costs time and money, so budget accordingly.
In some states, the owner can reclaim the property by paying back the overdue taxes, interest and penalties. If the owner redeems, you may receive your bid amount plus interest. Make sure you know how long the redemption period lasts before you bid.
Calculate the after‑repair value of the property minus repair costs, holding costs and your desired profit. Never bid more than this number. Disciplined bidding helps you avoid paying far more than a property is worth.
Final Thoughts
Tax sale investing can be highly profitable, but only if you approach it with the right tools and knowledge. Don’t gamble with your future, arm yourself with education and make informed decisions to avoid tax sale mistakes.
PS: Josh is going to walk you through some of his recent findings at the 3+ tax sales a week he’s been attending. Watch it above!
