Like in any market, excessive competition at Tax Deed auctions will affect the prices drive them up closer to the true market value. However in the Tax Deed arena has some characteristics, which prevent this from happen.

Characteristic #1: Cash requirements.

Tax Deed Sales are usually a Cash affair. That means you can't come to an auction with $500.00 in your pocket expecting to be able to buy a $100,000 property and then spend the next few weeks qualifying for financing, like it happens in the regular market for residential homes. Instead most counties have regulations expecting any winning bidder to come up with the full cash within somewhere between 24 and 48 hours from the sale.

As a result, because most of the population does not have $100,000 or even $10,000 sitting in their bank accounts unused, the vast majority of the population will and cannot attend the auctions to buy a property.

Characteristic #2: Insurability of title

Most people and even banks think that the title of a property purchased at Tax Deed sale is not insurable and first must pass through a Quiet Title Suit. While this is not exactly true (there are ways to insure these properties) banks in particular are very conservative institutions, and they usually (mostly) do not finance properties purchases from Tax Deed Sales. So even if an investor does his due diligence in advance, finds an awesome property with a high value and a very low starting bid, it will be almost impossible to get a regular bank to commit to financing this deal.

As a result not only does the county require cash but it is almost impossible to get that cash from any conventional financing institution. So short of obtaining a private money loan (bye the way a very feasible option), the only way to get a property is to have the cash at hand, something only a small fraction of the general population has access to at any given time.

Characteristic #3: Image

Even for properties where bidding start at the lower end of the spectrum, most people shy away from these auctions because they can just not imagine that a property which has an opening bid of $300.00 is any good. These properties are admittedly not in downtown of a larger city, but rather in the outskirts or in more rural areas, but in the majority they are pretty nice properties, worth perhaps $5,000 to $10,000 and usually vacant or raw land, but that also means that competition on these is usually quite low and you can get some awesome deals here.

And many investors skip these properties in favor of more valuable pieces of land.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Buying Cheap Government Foreclosed Houses
Today, not every one has the leisure of purchasing a brand new mansion. Considering the struggle to make it in every day, money is definitely the controlling factor in buying a house. Thus, people must consider options that will help them save money. One can consider buying old houses that need ... more...

Online Real Estate Auction - Find the Perfect Vacation or Investment Property
Buying real estate online has become a common practice with the birth of the Internet. Buying property can often times be much easier than purchasing a car or other items online. If you're an investor or looking for that ideal vacation property. The Internet may be the best solution for you. Many ... more...

The Foreclosure Process for Real Estate Investors
Are you looking at foreclosures as a way to continue to build your real estate portfolio or to reposition equity? This article looks at the foreclosure process for real estate investors. Changing market conditions and rising interest rates have pushed increasing numbers of property owners over the ... more...

Making A Good Profit From Buying And Selling Repo Real Estate
Buying and selling of repo real estate can make you a good profit since there is a good market from the real estate sector. If you will consider the good margin that you can get from selling repo real estate which you have bought at a reasonably low price, you will realize that indeed it is wise to ... more...