How to Buy an Abandoned House: Tax Sales, Foreclosures and Land Banks

Buying an abandoned house can be a way to own a home with character, save a piece of local history, or take on a rewarding renovation project. It can also be complicated. Abandoned properties often come with unpaid taxes, unclear ownership, and serious physical problems. Understanding the main purchase routes – and their pitfalls – is the first step toward making a smart decision.

Route 1: Buy directly from the owner

The simplest route, when possible, is to find the owner and make an offer. Many vacant houses belong to heirs who live far away and would be relieved to sell. Others belong to owners who intended to fix the house but never did. Start by identifying the owner through county property records – our guide on finding the owner of an abandoned property explains how.

A direct purchase generally works like any other real estate transaction: you negotiate a price, sign a purchase agreement, order a title search, and close, ideally with title insurance. If the owner has died, the estate may need to go through probate before the house can be sold, which can take time.

Route 2: Tax lien sales

When property taxes go unpaid, many local governments eventually take action to collect them. In states that use tax lien sales, the government sells a certificate representing the unpaid taxes to an investor. The investor pays the tax debt and, in return, earns interest or penalties set by law when the owner pays it back.

Crucially, buying a tax lien usually does not mean you get the house. The owner typically has a redemption period – the length varies by state – to pay off the debt. Most liens are redeemed. If the owner doesn't redeem within the allowed time, the lienholder may be able to start a process to obtain the property, but that process involves specific legal steps, notices, and costs. Tax lien investing is often more about earning interest than acquiring homes.

Route 3: Tax deed sales

In states that use tax deed sales, the government sells the property itself, often at a public auction, after the owner has failed to pay taxes for a certain period. The winning bidder receives a deed. This sounds straightforward, but there are important cautions:

• Title may not be clean. A tax deed doesn't always wipe out every other claim, and some states give former owners a right to redeem even after the sale. Many buyers need a court action, often called a quiet title action, before a title insurer will issue a policy.
• You may not be able to inspect inside. Properties are frequently sold "as is," and entering before you own the property is trespassing.
• Occupants may still live there. If someone is living in the house, removing them requires a legal process.
• Payment terms are strict. Auctions often require payment in full quickly, sometimes the same day.

Some states use hybrid systems or redeemable deeds, so research your county's rules carefully. County treasurer or tax collector websites usually publish sale procedures, schedules, and lists of properties.

Route 4: Foreclosures and bank-owned homes

When a mortgage goes unpaid, the lender may foreclose. Foreclosed properties may be sold at a public foreclosure auction or, if they don't sell, become "real estate owned" (REO) by the bank. Bank-owned homes are typically listed through real estate agents and can be purchased more like a normal home, though usually as-is. Government-backed agencies also sell foreclosed homes through their own listing programs.

Auction purchases carry more risk – limited inspection, quick payment requirements, and possible liens – while REO purchases tend to offer more information and the possibility of title insurance.

Route 5: Land banks

A number of states have created land banks, public or nonprofit organizations that acquire vacant and tax-foreclosed properties and return them to productive use. Land banks often sell houses to buyers who commit to renovating them, sometimes at modest prices. They may also clear title problems before selling, which can be a big advantage. Expect an application process, proof of funds or financing, a renovation plan, and deadlines for completing work. Learn more in what happens to abandoned houses.

What about adverse possession?

You may hear stories about people gaining ownership of abandoned property by occupying it for years. Adverse possession does exist in US law, but the requirements are strict, vary by state, and typically involve open, continuous possession for many years, sometimes along with paying property taxes. It is not a practical or advisable way to acquire a house, and occupying property you don't own can expose you to criminal and civil liability.

Do your homework before you bid or buy

• Research title: order a title search to uncover liens, mortgages, judgments, and ownership issues.
• Check local code enforcement: ask about open violations, demolition orders, or condemnation status.
• Look at utilities: unpaid water or sewer bills may attach to the property in some places.
• Estimate repairs realistically: see our guide on the risks and hidden costs of buying an abandoned home.
• Plan financing: many lenders won't finance uninhabitable homes with conventional mortgages, though renovation loans exist.
• Visit only legally: view the exterior from public property and inspect the interior only with permission.

The bottom line

There are several paths to buying an abandoned house, each with its own rules and risks. Direct purchases and land bank sales tend to be the most beginner-friendly, while tax and foreclosure auctions reward experience and careful research. Whatever route you choose, involve local professionals early and budget for surprises.

Go deeper with abandoned houses for sale: where to find them, buying abandoned property at auction, and how much it costs to renovate an abandoned house.

Frequently Asked Questions

Can you buy an abandoned house cheap?

Sometimes, through tax sales, land banks, or motivated owners. But low prices often come with high repair costs, so budget for the whole project.

Can I just move into an abandoned house and claim it?

No. Moving in without permission is trespassing. Adverse possession requires many years and strict conditions. See how to claim an abandoned house.

Can I get a mortgage on an abandoned house?

Many standard loans require a habitable property. Renovation loans, cash, or portfolio lenders are common alternatives.

What's the first step to buying an abandoned house?

Identify the owner through public records and research title, taxes, and code violations before making an offer.