Reference
Glossary
Plain-English definitions of the terms used in tax lien and tax deed sales.
Definitions here describe how the terms are generally used. State law can define them differently, so the state rules and the county's own instructions control.
Redemption period
The window after a sale during which the former owner can pay off the debt and reclaim the property or clear the lien. It is usually measured in months or years and starts from a defined event, such as the sale, the recording of the deed, or the issuance of the deed.
Redemption
The act of the owner (or another party with an interest) paying the amount required to end the sale's effect and keep the property.
Bid-down
A bidding method where the interest rate is bid down rather than the price bid up. The winner is the bidder willing to accept the lowest rate, and the lien is sold for the full amount owed. Common in lien states.
Premium bid
A bid where the winner pays more than the amount owed, and the surplus may be treated as excess proceeds. Sometimes used to award a property to the highest premium bidder.
Penalty
A fixed percentage charged instead of, or in addition to, interest. A penalty is often a one-time percentage of the tax or the redemption amount.
Interest
The rate the owner pays to redeem a lien or redeemable deed. It can be a flat annual rate, a bid-down rate, or a schedule that steps up over time.
Certificate (tax certificate / tax lien certificate)
The document a lien buyer receives as proof of the purchase. It is not a deed; it is evidence of a claim that can later be converted into a deed if the property is not redeemed.
Tax deed application
The formal step a certificate holder takes to convert an unredeemed certificate into a deed. It usually involves paperwork, fees, and sometimes a court process, and it can take months.
Tax deed
The deed that conveys the property to the purchaser at a deed sale or after a tax deed application. It may be issued by a court, a clerk, or an officer.
Quiet title
A court action to settle ownership and clear competing claims. Deed buyers often use it to make title marketable, because tax sales do not always wipe every lien.
Overages / excess proceeds
Money left over when a sale price exceeds the taxes, fees, and costs owed. Overages generally belong to the former owner or other lienholders, not the buyer, and are claimed through a separate process.
Deposit
Money a bidder must post before or at the sale, often a flat amount or a percentage of the bid. It is usually applied to the purchase price if you win and is often non-refundable if you fail to pay.
Registration
The step of signing up as a bidder before a sale, sometimes with an application, identification, and a tax-clearance statement. Deadlines and forms are set by the county.
Minimum bid
The lowest amount a county will accept, often the taxes owed plus costs. Do not treat it as the true cost; add fees, title work, and possession costs.
Opening bid / beginning bid
The starting amount at auction. In a bid-down, the opening bid is a maximum interest rate; in a premium sale, it is the amount owed.
Adjudged value
A court- or assessor-determined value used as a reference for the property, often set during the foreclosure or judgment that led to the sale. It is not necessarily market value.
Delinquent taxes
Property taxes that were not paid by the due date and are the basis for the sale.
Tax sale / tax auction
The public or online sale at which the county sells liens or properties for unpaid taxes.
Lien
A legal claim against property securing a debt. A tax lien secures unpaid property taxes.
Deed
The legal document that transfers ownership of real property.
Homestead
A property that is the owner's primary residence. Homesteads often get longer redemption periods or other protections.
Assessed value
The value a local assessor assigns for tax purposes. It may differ substantially from market value.
Market value
The price a willing buyer and seller would agree on in an open market.
Grantor / grantee
The person transferring an interest (grantor) and the person receiving it (grantee). On a tax deed, the county or officer is typically the grantor.
Escrow / impound
Funds held by a third party to cover taxes, insurance, or other obligations until they are paid or resolved.
Certificate of title
A document, sometimes issued by a court, confirming the title the purchaser received. It is not the same as a vehicle-style certificate of title.
Notice
Formal publication or mailing required before a sale. Missing a notice challenge can invalidate a sale later, so notices matter to buyers and owners alike.
Tax clearance / no-delinquency statement
A document from the tax collector confirming the bidder owes no delinquent taxes, sometimes required before bidding or before a deed is delivered.
Excess judgment / deficiency
In a foreclosure-style sale, the amount by which the debt exceeds the sale price (deficiency) or the price exceeds the debt (excess).