What happens to the excess due when the property is lost due to tax sale?

What happens to the surplus owed when the property is forfeited through the tax sale? The answer: it depends on where you are. In about half of the states, that surplus is permanently lost to the government. In the rest of the states, the surplus is kept for the owner to collect. If he or she doesn’t get paid on time, it will also be returned to the government, with no recourse for the owner ever again.

Here is a great opportunity for anyone looking to increase their real estate income. The surplus due when the property is forfeited by tax sale is often left accidentally by the delinquent owner due to ignorance of the fact that he is entitled to it. As stated above, you have to claim it quickly or it will be lost permanently. By finding records of the surplus and then doing the necessary research to find the owners, who may have moved many years ago and many times since, you can make some very good finder’s fees for your information. You’d be surprised how few previous owners have any idea where a large amount of money owed to them might come from.

Due to an almost completely unknown loophole, sales tax surpluses (and foreclosure surpluses) are not subject to the finder’s fee limits. The standard finder’s fee on surplus real estate is 30-50%, depending on what is involved in paying the claim. Owners are more than happy to pay this on a contingency basis (they never have to pay, if the claim is not paid), especially since they would otherwise have lost everything. You will find that these owners are a surprisingly appreciative and reasonable group of people.

With the unfortunate situation of foreclosure in today’s economy, these funds are being created at an alarming rate. While there is not much you can do about it, you can help others avoid losing their money while earning a good income by helping to collect these surplus funds. Not a bad way to make a living.