Struck-Off Property
A property that failed to sell at a tax auction because no bidder met the minimum bid. The property is 'struck off' to the taxing authority, which then holds title and may sell it later through a resale process.
Understanding Struck-Off Property
When a property goes to tax sale and receives no acceptable bids, it is struck off to the taxing unit (county, city, or school district) that conducted the sale. The taxing authority becomes the owner of record, holding the property until it can be sold.
Struck-off properties often represent excellent opportunities for investors because they can frequently be purchased for less than the original minimum bid through negotiated sales or resale auctions. Taxing authorities are motivated sellers—they want properties back on the tax rolls generating revenue.
However, struck-off properties require careful due diligence. They often failed to sell for reasons: severe title problems, environmental contamination, properties landlocked without access, or structures in poor condition. The lack of bidder interest is itself important market information.
Purchasing struck-off properties typically involves contacting the taxing authority directly, submitting offers, and negotiating terms. Some jurisdictions hold periodic resale auctions specifically for struck-off inventory. The process and requirements vary by jurisdiction.
Real-World Example
A rural 5-acre lot goes to tax sale with a minimum bid of $8,500 covering all delinquent taxes. No one bids, so it's struck off to the county. Six months later, an investor contacts the county and purchases the lot for $4,000 through a negotiated sale.
Texas-Specific Information
In Texas, struck-off properties are held by the taxing units and can be sold through resale. Texas Tax Code Section 34.05 governs the resale of struck-off properties. Taxing units may sell for less than the judgment amount. Properties can be purchased directly from the taxing unit without waiting for another auction.
Related Terms
Tax Sale
A public auction where properties with delinquent taxes are sold to recover unpaid taxes. Tax sales are conducted by government authorities and allow investors to purchase properties or tax liens at significant discounts.
Tax Deed
A legal document conveying ownership of property sold at a tax sale due to unpaid property taxes. The tax deed transfers title from the delinquent owner to the purchaser, subject to any applicable redemption period.
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