Foreclosure & Tax Deed Auction Calculator — Bid, Lien, ARV Profit Analysis

Strategy

Winning auction bid

After Repair Value (ARV)

Rehab budget

Holding costs (4-6 months)

Tax + insurance + utilities + interest

Auction buyer premium

Selling costs (resale)

Inherited liens (IRS, HOA, mechanic''s)

Auction buyers may inherit non-mortgage liens — title search required!

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How to use

1 Enter your maximum auction bid (the amount you'd be willing to win at).
2 Enter the After Repair Value (ARV) — what the property would sell for after renovation.
3 Enter rehab budget. Auction properties often need 30-50% more rehab than initially appears.
4 Enter holding costs (3-6 months of taxes, insurance, utilities while rehabbing).
5 Enter inherited liens you'll need to clear (IRS, HOA, mechanic's — these survive most auction sales). Click Calculate to see total project cost, expected profit, and 70% rule pass/fail.

Three Main US Property Auction Types

Type	Reason	Key risk
Foreclosure auction (judicial)	Court-ordered after lender lawsuit (22 states)	Right of redemption period; IRS liens survive 120 days
Trustee sale / non-judicial (28 states)	Lender forecloses without court (CA, AZ, TX, GA, etc.)	Non-IRS junior liens may survive; no warranty
Tax deed auction	County sells for unpaid property taxes	Quiet title action often required ($3-5K legal); short redemption
Sheriff sale	Court order auctions for unpaid judgments	Buyer takes "as is, where is" — no inspection rights
Bank-owned (REO)	Property bank already took back via foreclosure	Lower risk; bank typically delivers clear title
HUD home auction	FHA-foreclosed properties	Owner-occupant priority for first 30 days

Auction-Specific Costs

Cost	Typical range
Buyer's premium (auctioneer fee)	5-10% of winning bid
Required earnest money deposit	5-10% same day, balance 30 days
Title search	$200-500 (do BEFORE bidding)
Eviction (if occupied)	$1,500-5,000 + 1-3 months
IRS lien clearance	120-day waiting period or partial release
Quiet title action (tax deeds)	$3,000-5,000 attorney fees
Lockout / cleanout	$500-3,000 if abandoned with debris

The 70% Rule Adapted for Auctions

Standard fix-and-flip 70% rule: Max all-in cost ≤ ARV × 0.70. For auctions: Max bid ≤ ARV × 0.70 − rehab − inherited liens − selling costs − holding costs. The deeper discount accounts for auction-specific risks: title surprises, eviction costs, hidden damage, IRS lien clearance delays. Aggressive bidders use 75% rule; conservative bidders use 65%.

Title Risk: The Auction Killer

Auctions sell "as-is, where-is" with NO title insurance, NO warranty, NO inspection contingency. Junior liens are typically wiped out by foreclosure but: IRS liens survive 120 days; HOA liens have super-priority in some states; mechanic's liens may survive depending on filing date; tax liens always survive. Always run title search through county recorder's online portal before bidding. Hire title insurance company for $200-500 title abstract on properties over $100K.

Common Auction Mistakes (Walkaway Costs)

(1) Not driving the property — bidding sight-unseen. (2) Not reading the title abstract — discovering $200K IRS lien post-auction. (3) Underestimating rehab — auction homes often vandalized, water-damaged, ripped of copper. (4) Eviction surprise — squatter or holdover former owner requiring 60-90 day legal process. (5) Right of redemption — original owner may reclaim property within 1-12 months in some states. Defaults: forfeit deposit (5-10% of bid).

FAQ

Q How do property auctions work in the US?

Three main types: judicial foreclosure (court-ordered, 22 states), non-judicial trustee sale (28 states like CA/TX/AZ), and tax deed auction (county sells for unpaid taxes). Properties sold "as-is, where-is" with NO inspection, warranty, or title insurance. Buyer's premium 5-10% added to winning bid. Most require 5-10% deposit at sale, balance within 30 days.

Q What is the auction 70% rule?

Max bid should not exceed: ARV × 0.70 − rehab − inherited liens − selling costs − holding costs. The 30%+ margin covers auction-specific risks: title surprises, eviction costs, hidden damage, IRS lien clearance delays. Aggressive flippers use 75% rule; conservative buyers use 65% for unknown markets.

Q Do liens survive a foreclosure auction?

Mostly no, but key exceptions: IRS liens survive 120 days (you can clear with partial release or wait); HOA liens have super-priority in some states (NV, DC, etc.); mechanic's liens may survive based on filing date; property tax liens always survive. Always run title search before bidding — surprise liens can wipe out profit.

Q What is the difference between judicial and non-judicial foreclosure?

Judicial (22 states like FL, NY, IL): lender must sue in court; longer timeline (12-24 months); right of redemption common; safer for buyers. Non-judicial / trustee sale (28 states like CA, TX, AZ, GA): lender forecloses without court; faster (3-6 months); harder for original owner to redeem; junior lien wipeout less reliable.

Q How much earnest money is required at auction?

Typically 5-10% of winning bid same day, in cashier's check or wire. Balance due within 30 days. If you fail to close, you forfeit the deposit. Some online auction platforms (Auction.com, Hubzu, Xome) require pre-approval and minimum funds verification before allowing bidding.

Q What is a tax deed auction?

County sells properties for unpaid property taxes. Bidder pays the tax debt + premium. In some states (FL, GA), buyer gets a tax deed (full ownership) immediately. In others (TX, OH), buyer gets a tax lien certificate that can later be foreclosed. Quiet title action ($3-5K) typically required to clear chain of title before reselling — budget for this.

Q Can the original owner reclaim the property?

In some cases, yes. "Right of redemption" allows original owner to repay debt + interest and reclaim property within a set period: 30 days (most states), up to 12 months (judicial states like Alabama, Iowa). Tax deed redemption typically 6 months to 4 years depending on state. Always verify redemption period before investing in rehab.

Q Is auction investing profitable for beginners?

Generally no. The combination of "as-is" risk, title complications, eviction costs, hidden rehab, and short closing windows makes auctions difficult for newcomers. Better starting point: bank-owned (REO) listings, HUD homes, or Auction.com online auctions where some inspection access is allowed. Build experience with 1-2 deals before traditional courthouse auctions.