Last Updated on September 9, 2025
Tax Title Companies: Why You Need Them for Tax Deed Investing
Tax title companies help real‑estate investors research a property’s ownership and lien history, clear defects in the title and facilitate sales. Working closely with these firms can make the difference between a profitable tax deed investment and a costly mistake.
What Is a Tax Title Company?
A tax title company is a business that performs title searches, resolves title defects and issues title insurance. During a title search, a professional examines public records (deeds, mortgages, tax records and court judgments) to verify the legal ownership of a property and find any claims, liens or restrictions. If everything is clean, the company can insure the title and handle closing. If defects exist, it helps clear them so you can take ownership without legal problems.
How Do Tax Deeds and Tax Liens Work?
A tax deed allows you to buy a property outright when the owner fails to pay property taxes. In a tax deed sale, the county auctions the property with a minimum bid equal to the back taxes, interest and fees; the highest bidder pays the amount owed and receives the deed. A tax lien certificate, in contrast, is a claim on the unpaid taxes; the investor pays the taxes and earns interest until the owner redeems the property. According to PropLogix, tax lien certificates and deeds are both used to generate lost revenue from unpaid taxes, and both can yield profits for investors. However, tax deeds transfer ownership of the property itself, while tax liens transfer only the right to collect interest and penalties.
| Feature | Tax lien certificate | Tax deed |
| What you buy | A claim on unpaid property taxes | The property itself |
| Return | Interest and penalties paid by owner | Full ownership after paying back taxes |
| Risk | Owner may redeem and you earn interest | Must inspect property condition and clear title |
| Typical bid | Bids down the interest rate | Bids up from minimum taxes owed |
Why Should Investors Build Relationships with Title Companies?
Title issues can derail a profitable tax deed purchase. Even though most tax deed sales wipe out mortgages, some liens survive and unpaid municipal fees can resurface. A title search identifies mortgages, unpaid taxes, HOA dues and other liens so you know exactly what you’re buying. Title companies also provide title insurance, which is often required by lenders and gives peace of mind if you later sell the property. By working with a local title agent, you gain access to property histories, local knowledge and help navigating state‑specific rules.
How to Approach a Title Company When You’re New
Start by researching title companies in the county where you plan to invest. Call a few and introduce yourself as a real‑estate investor focusing on tax defaulted properties. Be honest if you’re new—good firms welcome future clients. Ask about:
- Title search fees
Some charge per search, while others offer bundles.
- Access to online records
A few firms allow investors to log in and pull preliminary reports.
- Experience with tax deeds
Newer agents may be more willing to help you get started
- Turnaround times
Find out how quickly they can pull a report; this matters before auctions.
What Information Should You Request From a Title Company?
Ask for a detailed title report that includes:
- A history of ownership (chain of title) and any breaks or missing links.
- A list of outstanding liens and encumbrances (mortgages, tax liens, HOA liens and judgments).
- Information on redemption periods in the county; some states allow owners to redeem tax deeds after the sale.
- Any easements or restrictions that might affect the property’s value or use.
With this information, you can estimate your total investment, budget for extra fees and decide whether to bid.
Tips for Staying Organized
Keeping track of multiple properties, auctions and follow‑ups can become overwhelming. To stay on top of things:
- Use a digital note system: Apps like Evernote or a spreadsheet help you track calls, bids and title search results.
- Create a property due‑diligence checklist: Include items such as property condition, comparable values and redemption periods.
- Set reminders for deadlines: Auction dates, redemption periods and follow‑up calls should be scheduled.
- Review regularly: Update your list after each auction or call to refine your strategy.
Frequently Asked Questions
Tax deed sales are public auctions conducted by counties to sell properties with delinquent taxes. The sale typically has a minimum bid equal to unpaid taxes plus fees; the highest bidder wins. Many counties post sale dates weeks in advance.
County treasurer websites, clerk’s offices and dedicated auction platforms publish lists of upcoming tax deed and tax lien sales. You can also check the auction calendar in our knowledge vault or sign up for updates.
Yes. Counties usually require certified funds at the auction. Be sure to read the county’s payment instructions to avoid forfeiting your bid.
Order a title search before bidding and work with a title company experienced in tax deed properties. They can identify surviving liens and help you obtain title insurance.
Final Thoughts
Building relationships with knowledgeable title companies is a key step in successful tax deed investing. These professionals help you verify ownership, uncover hidden liens and comply with state regulations, which reduces risk and speeds up sales. By understanding the differences between tax liens and tax deeds, staying organized and asking the right questions, you can approach auctions with confidence.
Further Learning and Resources
- For a step‑by‑step guide on choosing the right properties, see our article on picking the right properties to drive for tax‑deed sales.
- Discover the essential mindset needed for success in The #1 Trait You Need To Make Tax Liens & Deeds Work.
- Learn how we keep our data organized in The free app we use to organize tax lien & deed data.
Would you like help buying your first tax deed property at a steep discount? Book a free call through our success center. For more training and resources, grab our Free Mini Course and start your journey toward profitable tax deed investing today.
