Last Updated on September 9, 2025
Table of contents
Discovering Tax Sale Overages and Overbids
When a county sells a tax‑delinquent property, the winning bid often exceeds the taxes owed. The extra money—called a tax sale overage or tax deed overbid—belongs to the former property owner. Counties typically hold these surplus funds for a limited time; if the owner doesn’t claim them, the county keeps the money. Investors who understand the rules can help owners recover these funds in return for a finder’s fee.
What Are Tax Sale Overages and How Do They Happen?
A tax sale overage occurs when a property sells for more than the unpaid taxes, penalties, and fees. In simple terms:
- Sale price: the winning bid at auction.
- Taxes owed: unpaid property taxes plus penalties and interest.
- Overage: the difference, which is owed to the former owner.
For example, if a property sells for $50 000 at auction and the taxes owed are $30 000, the surplus $20 000 is the overage. Laws vary by state, so always check local rules regarding claim periods and procedures.
Why Don’t Owners Claim These Funds?
Counties often send notices to the last known address, which may be the foreclosed property. Many owners think they’ve lost everything and don’t realize they are entitled to any money. Some counties are “rewarded” if funds go unclaimed. Additionally, the process can be confusing, and people may not want to deal with paperwork.
How Investors Can Earn Finders’ Fees
Because many homeowners don’t know about overages, investors can step in as “recovery agents.” We identify properties that sold for more than the taxes owed, contact the owners, and offer to help them claim the money for a fee. This arrangement is a win‑win: owners recover funds they didn’t know about, and we earn a percentage for our time and knowledge. However, each state has its own rules about finder’s fees and representation, so check legal requirements before getting involved.
How to Claim Overage Funds
Step‑by‑Step Guide to Claiming Overage Funds
- Check the County’s Overage List
Many counties publish lists of surplus funds on their websites. If you can’t find it, call the county treasurer or tax collector.
- Gather Documentation
You’ll usually need: Proof of ownership (deed or title). Government‑issued ID. Completed claim form.
- Submit the Claim
Each county has specific filing procedures. Some allow online submission; others require mailing or in‑person filing. Always meet the deadline; missed claims mean the funds go to the county
- Follow Up
Processing can take weeks or months due to county backlogs. Keep copies of everything and be polite but persistent when checking the status.
Benefits and
Benefits and Risks of Overage Investing
Benefits
- Potential profit: You can earn finder’s fees from surplus funds.
- Low competition: Many investors overlook overage recovery.
- Helping others: Owners reclaim money they never expected.
Risks
- Legal complexity: Each state’s laws differ, so consult local statutes.
- Time‑consuming: Research and paperwork take patience.
- Scams exist: Some companies charge excessive fees or make false promises. Always operate ethically and within state guidelines.
FAQs
An overage happens when the winning bid at a tax sale exceeds the sum of back taxes, penalties, and fees. For example, if taxes owed are $30 000 and the winning bid is $50 000, the $20 000 difference is the overage.
Usually, the former property owner or their heirs are entitled to the surplus. In some states, lienholders may also have rights. Check your local laws to confirm.
Deadlines vary by state and county. Some jurisdictions allow up to a year; others require claims within a few months. Missing the deadline means the county keeps the money.
You can file a claim yourself, but if there are multiple heirs or liens, consulting an attorney may be wise. Investors acting as recovery agents must follow state laws regarding representation and fees.
Related Reading
Want to deepen your understanding of tax lien and deed investing? Learn how to identify profitable properties and avoid costly mistakes in our post on How to pick properties for tax deed sales? . If you’re wondering what trait helps investors succeed, check out The #1 trait you need to make tax liens and deeds work.
Final Thoughts and Call to Action
Tax sale overages can be a lucrative addition to your investing toolkit when approached ethically and with proper research. We’ve seen investors earn substantial fees while helping homeowners reclaim money they never expected. If you’re ready to explore tax liens and deeds further, don’t go it alone. Get started with our free mini course and discover how to buy tax deed properties at deep discounts. You can also book a free call to discuss your goals, or explore our auction calendar to find upcoming sales. With patience and due diligence, tax lien investing can become a reliable strategy for building wealth and helping others.
