Over-the-Counter Tax Liens: The Zero-Competition Play

Most new tax lien investors picture a crowded auction room and a fast-talking auctioneer. Ted Thomas — who has spent decades as one of the most-quoted educators in the tax lien and tax deed world — teaches a quieter path that skips the auction entirely: over-the-counter (OTC) tax liens. These are the certificates nobody bought at the sale, sitting on a county list, available at the statutory maximum interest rate with zero bidding competition. This guide breaks down how OTC liens actually work, why the inventory exists, and the due diligence that separates a smart buy from a worthless piece of paper.

A note on framing: Ted Thomas has not endorsed LienSuite, and nothing here is affiliated with him. Over-the-counter tax lien investing is a strategy he has taught publicly for years on his Tax Lien Investing Podcast and through his educational material on OTC liens. We're writing LienSuite's own practical take on the topic because it's one of the most misunderstood corners of this niche — and because the research it demands is exactly the kind of work our platform was built for.

What Over-the-Counter Tax Liens Actually Are

When a property owner falls behind on property taxes, the county eventually sells a tax lien certificate against the property to recover the unpaid revenue. At a live or online auction, investors bid for the right to that certificate. The winning investor pays the back taxes and, in return, earns interest (and sometimes the property itself) when the owner redeems — or fails to.

But not every certificate sells. Whatever is left over after the auction goes onto a list that the county will sell directly to any qualified buyer, first-come first-served, at any time. No auction. No competing bidders. That leftover inventory is what the industry calls "over-the-counter" — and depending on the jurisdiction, you'll also see it labeled "assignment purchases," "county-held certificates," "struck-off" liens, or the old-school term "scavenger list."

The core mechanic is identical to an auction lien: you pay the delinquent taxes, you hold a secured interest in the property, and you collect your principal plus interest when the owner redeems. If they never redeem within the statutory window, you may be able to foreclose and take the property for a fraction of its value. The only difference is how you acquire the certificate.

Why the Competition Disappears

This is the part that sounds too good to be true, so it's worth being honest about. OTC certificates didn't sell at auction for a reason. Sometimes the reason is good news for you; sometimes it's a red flag. The common causes:

• Supply simply outran demand. A county dumps thousands of certificates into a single sale and there aren't enough bidders in the room (or logged into the online portal) to absorb them all. The leftovers are perfectly good liens that nobody got to.
• Bidders ran out of capital. Investors arrive with a fixed budget, spend it on the properties they researched, and leave. Everything past their list goes unsold regardless of quality.
• Winning bidders failed to pay. Someone got excited, won the bid, and then never funded it. The certificate bounces back to the county and lands on the OTC list — often within days of the auction.
• The property has real problems. Environmental issues, a worthless sliver of land, a mobile home with no land, or a property buried under other senior liens. These are the ones to avoid, and they're exactly why due diligence is non-negotiable on OTC inventory.

Ted Thomas's framing is that the first three categories create a genuine opportunity: solid certificates that went unsold for reasons that have nothing to do with the underlying property. Your job is to find those and screen out the fourth category.

You Get the Statutory Maximum Rate

Here's the structural advantage that makes OTC worth understanding. At a competitive auction, investors bid the interest rate down. In a hot Florida county, an 18% statutory lien might get bid down to 5%, 3%, or even lower as investors fight over the same certificate. The competition erodes your return.

With OTC liens there is no bidding, so you receive the full statutory maximum rate the state allows. Those maximums range roughly from 9% to 24% depending on the state, with Iowa's 24% historically the headline number. You're not sacrificing yield to outbid anyone — you take the certificate at the rate written into state law.

Attribute	Auction Tax Lien	Over-the-Counter Tax Lien
Interest rate	Bid down by competition	Statutory maximum
Timing	Fixed auction date	Any time, year-round
Competition	High in desirable counties	Effectively none
Pace	Fast, high-pressure	Self-paced, deliberate
Due diligence burden	High (you choose what to research)	Higher (you research the leftovers)

If you're brand new to this asset class, it helps to understand the auction mechanics first. Our beginner's guide to tax lien investing walks through redemption periods, interest accrual, and the certificate lifecycle in plain language before you start chasing OTC lists.

How to Actually Buy an OTC Tax Lien

The process is unglamorous, which is exactly why most investors never bother — and why the inventory stays available. Here's the workflow.

1. Get the county's OTC list. Call or email the county treasurer, tax collector, or county clerk and ask for the list of unsold or county-held tax lien certificates. Terminology varies, so ask in a few ways: "over-the-counter," "assignment," "county-held," or "struck-off." Many counties post these as a downloadable spreadsheet or PDF; others will email it on request.
2. Pull the list right after the auction. Ted Thomas's timing advice is to check immediately after the annual sale, when overbid-and-didn't-pay certificates and genuine leftovers flood the list before anyone else has researched them. That's your window of cleanest inventory.
3. Run due diligence on every certificate you're considering. This is the entire game — see the next section. Never buy off the list blind.
4. Confirm availability and the exact payoff. Contact the county to verify the certificate is still available and get the precise amount due, including any accrued interest, fees, and required paperwork.
5. Submit payment and documentation. Each county has its own form, accepted payment methods (often certified funds or ACH), and sometimes a buyer registration step. Follow it exactly.
6. Receive and record your certificate. Track the redemption deadline carefully — your right to foreclose, if it comes to that, depends on hitting statutory notice and timing requirements.

The Due Diligence That Makes or Breaks an OTC Deal

On OTC liens, due diligence isn't optional polish — it's the whole edge. You are, by definition, buying certificates that other investors passed on. Some passed because they ran out of money. Others passed because the property is a liability. Your research is what tells the two apart. Before you wire a dollar, confirm:

• The property actually has value. Pull the assessed value and, ideally, a market estimate. A $400 lien against a buildable lot worth $40,000 is interesting; a $400 lien against a landlocked drainage easement is not.
• What else is attached to it. Federal IRS liens, municipal liens, code-enforcement liens, and other encumbrances can survive or complicate your position. A property tax lien is usually senior, but you need to confirm the full picture, not assume it.
• The owner situation. Is the owner alive, deceased, or one of several heirs? A deceased owner with no clear heir can mean a long redemption silence and a real path to taking the property — but also a tangled title you'll eventually need to cure.
• Whether it's even a real, taxable parcel. Counties sometimes carry liens against slivers, common areas, or parcels with no independent use. Verify it's a standalone, usable property.
• Redemption history and timeline. Know exactly how long the owner has to redeem and what your options are when that window closes.

This is precisely the research that's tedious to do one parcel at a time on a county website — and where pre-enriched data earns its keep. LienSuite pulls tax-delinquent property records across 389 counties in all 50 states and scores each one on distress signals: years of delinquency, tax owed relative to value, and — critically for OTC work — deceased-owner flags and heir signals. Built-in skip trace and a deal pipeline let you go from a raw county list to a vetted shortlist without juggling five tools. You still confirm payoff and availability with the county, but you walk in already knowing which parcels are worth a phone call.

OTC Liens vs. Struck-Off Deeds: Don't Confuse Them

Terminology trips people up here, especially in deed states like Texas. "Over-the-counter" most often refers to unsold tax lien certificates in lien states. "Struck-off" usually refers to tax-sale properties (deeds) that didn't sell at a Texas sheriff's sale and reverted to the taxing entity, which then resells them. The acquisition concept is similar — buy what the auction missed — but the legal instrument and your rights differ significantly. If Texas is your market, read our dedicated struck-off property guide before applying OTC lien logic to a deed sale.

State rules matter enormously in this asset class. Interest rates, redemption periods, and whether a state even sells liens (versus deeds) all change the math. Our breakdown of the best states for tax lien investing is a good place to calibrate which OTC markets are worth your time.

Who OTC Investing Is Actually Good For

OTC tax liens reward patience and research over speed and capital. They're a strong fit if you:

• Want to invest remotely without traveling to or logging into a live auction.
• Are starting with modest capital and want to buy single certificates rather than compete for a portfolio.
• Enjoy (or are willing to do) the parcel-by-parcel research that competitive bidders skip.
• Value a predictable statutory return over the thrill of a bidding war.

They're a poor fit if you want to deploy large amounts of capital quickly, dislike paperwork, or expect to skip due diligence. The leftovers list is unforgiving to investors who buy on price alone.

Frequently Asked Questions

Does Ted Thomas endorse LienSuite?

No. Ted Thomas has not endorsed or partnered with LienSuite. He has taught over-the-counter tax lien strategy publicly for years; we built LienSuite to handle the property research that any serious OTC investor has to do, and we think his audience will find it useful. That's our view, not his.

Are over-the-counter tax liens safe?

They carry the same fundamental risks as any tax lien — plus the added caveat that you're buying what the auction passed on. The lien itself is a secured interest, but the property behind it may have problems. Diligent research on value, encumbrances, and the owner situation is what makes OTC liens reasonably safe. Buying blind off the list is not.

Can I buy OTC liens from any county?

Only counties in tax-lien states sell certificates, and not all of them maintain or sell an OTC list. Deed states work differently (see struck-off properties). Always confirm with the specific county treasurer or tax collector whether they sell unsold certificates over the counter and what their process is.

How much money do I need to start?

Less than most people assume. Many OTC certificates are small — a few hundred to a few thousand dollars in back taxes — which is part of the appeal for beginners. You can buy a single certificate to learn the process before scaling up.

What happens if the owner never pays?

If the owner doesn't redeem within the statutory redemption period, you can typically begin foreclosure to take title — subject to the state's specific notice and timing rules. This is where deceased-owner and heir situations get complicated, and where curative title work often follows. Plan for that path before you buy, not after.

Find the OTC Inventory Worth Buying

The hard part of over-the-counter investing was never getting the list — it's figuring out which of those leftover parcels is a quiet win and which is a money pit. That's a data problem, and it's the one LienSuite solves.

LienSuite gives you pre-scored tax-delinquent property data across 389 counties in all 50 states — with deceased-owner flags, heir signals, built-in skip trace, and a deal pipeline to track every certificate from research to redemption. Start with the free tier, pull the data for your target county, and see which parcels are worth a call before you ever contact the treasurer.