What is a Tax Lien Agent?

A Tax Lien Agent is a person or a company that will purchase tax lien certificates and/or tax deeds for an investor. So if you are one of those people who would love to put your money into safe, high yielding tax liens or tax deeds, but you don’t have a clue about how to do it properly, and you don’t have the time to learn, then you may want to invest through a tax lien agent.

You might want to think of a tax lien agent as a “broker.” You give them your money and they go out and purchase liens or deeds for you. They do all of the work: getting the tax sale list, doing due diligence on properties, bidding at the tax sale, recording and tracking your liens or deeds. And of course you will have to pay for this. Think about it this way, how much is your time worth. In other words what are you making per hour while they are out there doing all the work that you would have to put in if you were doing this on your own?

So the benefit to you of using a tax lien agent to purchase tax liens for you instead of doing it yourself is that someone else does all the work and you don’t have to put in the time. But there is another benefit to using a tax lien agent. They are very familiar with the tax lien investing process. They know the ins and outs of the business and they have a team in place for things like title searches, foreclosure procedures, etc. You would have to go out and find the talent that you need for these things, but they already have them.

So should you be using a tax lien agent for your investing? That depends on your situation. If you have a lot of money to invest and you are a highly paid professional with little time to learn the ins and outs of tax lien investing, then you are probably better off using a tax lien agent than trying to do it yourself. If, however you have small amounts of money to invest and your work schedule is flexible, you may want to do it yourself. Another reason that you might want to use an agent to invest for you is if you are a foreigner and you don’t have any contacts in the state that you want to invest in.

If you decide to use a tax lien agent, you want to use an agent that will not pool your money with other investors. You’ll want to have your own account and you want to make sure that the tax lien certificates and tax deeds are made out to your name the name of your business, not the agent. You also want to know what states they invest in and what is their average return.

Before you sign over your money to them make sure you understand their fees. Some agents will take a percentage off of your original investment and also charge a management fee – know what this is before you give them your money. You will also want to know what the minimum investment is and if there are any restrictions when taking your money or tax liens out of the account.

Investing through a tax lien agent can be very rewarding, but it can also be costly leaving you with less profit then you thought you were getting if you don’t know what all the fees are up front.