What is a tax certificate?

A tax certificate is evidence of a tax lien against a property, and in this situation it is evidence of a successful bid at a tax sale.

There are two kinds of tax sales in Cook County. (key points)

1.  Annual Tax Sale

• held every year (usually in January or February)

• tax certificates are sold to the lowest interest rate bidder. Bidders bid down the rate they are willing to receive in exchange for paying the tax in full.

• successful bidder must pay the tax in full and pick up all unpaid years

• the redemption period is 2 years on commercial and 2.5 years of residential

• most properties redeem (98%)

• summary....the annual sale is for tax buyers speculating the interest that they  will receive when the property redeems.  They are also interested in the right to "post" (pay) subsequent years to their buys as they become delinquent.  They are also interested in "deed plays" on  the 2% or so properties that do not redeem!

     2.      The Scavenger Sale  
              ("the counties sale of last resort", the "B" sale, or "after sale", etc)

• the Scavenger Sale is for properties offered but not bid on at the annual sale  

• held every two years (usually in the summer, this year delayed due to change of administration at treasure's off.)

• tax certificates are sold to the highest dollar bidder no matter how much is owed

• property must be at least 2 years delinquent

• redemption period is 6 months!!!!!

• most properties do not redeem (10-15%)

• summary.......most Scavenger Sale buyers bid expecting to wind up with the property because very few properties sold here will redeem. (my experience is 10-15% of what we buy redeems). If a property does redeem the certificate holder receives his bid money back from the county plus interest at approx. 1.5% per month.