Anyone can buy a home for a fraction of its appraised value at a tax foreclosure auction, but few people know how. There are foreclosed properties in virtually every city that will be going to auction, and anyone is eligible to bid on them.

All properties are subject to taxes, but not everyone who owns the property is able to pay the taxes on them. When the property owner gets behind on their taxes, the government agency (either the state or county) will conduct a tax foreclosure auction and sell the property to the highest bidder.

The laws regarding the sale of the property depend on which state the property is located in, so before you head down to the auction block, you need to be familiar with the rules and regulations for your state. Some states require the full purchase price to be paid on the date of the auction; other states will allow you pay off the purchase within a certain time frame. Some states require a cashiers check on the date of the auction; others will allow the fees to be deposited the next day. Again, check with your state to determine what the rules and regulations are.

Most property owners that have a home that is headed for a tax foreclosure auction will redeem the property prior to the auction. So the property that you really would like to purchase may not even be auctioned at the sale.

Keep in mind, the property owner may have additional rights to redeem the property after auction. If this happens, the owner usually must pay the fees and interest to the person who bought the property in the auction. Depending on the state, these interest charges can be quite substantial. Several people actually make a good living buying and redeeming properties at the tax foreclosure auction.

Usually the state sets the minimum price that the property must sell for, if that price is not reached, the state will acquire the property. Usually, this property will go back on the auction block with a reduced price.

This is not a get rich quick scheme (most of them never work), but it is a legitimate investment opportunity to buy property at below appraised value. You may not always get the home you were looking at, but sometimes you really can get lucky and get a home at substantial savings.

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