Last Updated on August 21, 2026
Estimated reading time: 7 minutes
Author: Dustin Hahn
Truth is: it can still be done safely and effectively, but…
…there are many properties that are not up to the standard of what you want to be investing in, so you need to careful.
There is specific research that is involved to know the properties well enough before you buy the actual OTC Deed. It can be highly rewarding, but there are also a few key things you need to know.
You do need to do your due diligence, and learn exactly what it is you a buying, because you don’t want to be buying a piece of land with environmental issues, city liens, or IRS liens on it that could steal away your profits.
Table of contents
- What Is an Over-the-Counter Tax Deed?
- Can You Flip an Over the Counter Tax Deed?
- Why Are Some Tax Deeds Left Over After the Auction?
- Why Should You Check for Environmental Problems?
- Is This Over-the-Counter Property Worth Flipping?
- What Is the Biggest Mistake With OTC Tax Deeds?
- A Simple Over the Counter Tax Deed Research Process
- Frequently Asked Questions
- Final Thoughts
Over-the-counter tax deeds can let investors buy tax foreclosed property without competing in the original auction. But the properties left after a sale often require extra research.
Some OTC properties are vacant lots. Others may have access problems, unpaid local charges, environmental concerns, or land-use limits. The low purchase price alone does not tell you whether the property is a good deal.
What Is an Over-the-Counter Tax Deed?
An over-the-counter tax deed is generally a property that did not sell through the normal tax sale process and later became available for purchase.
The exact system depends on the state and county.
For example, Mohave County, Arizona places unsold tax deed parcels on an OTC list after its online auction. Investors can submit offers, with the highest offer sent to the county board for approval. Maricopa County also states that parcels receiving no auction bids may later become available over the counter.
Other states use OTC tax liens instead of deeds. Always confirm what you are actually buying before sending money.
Can You Flip an Over the Counter Tax Deed?
Yes. An investor may buy an OTC tax deed and later resell the property, but only after confirming the property’s condition, title, and resale options.
The real advantage is that you may not have to compete against other bidders at the original auction. That does not mean every unsold parcel is worth buying.
There is usually a reason a property reached the OTC list.
Your job is to find out what that reason is.
A cheap parcel may be useful land with little investor attention. It could also be landlocked, too small to build on, contaminated, or burdened by another issue that makes resale difficult.
Why Are Some Tax Deeds Left Over After the Auction?
Properties can remain unsold because bidders did not value them above the minimum price or because investors found concerns during their research.
That does not automatically mean the property is bad.
An investor should review:
- The parcel size and shape
- Legal and physical road access
- Current land use
- County assessment records
- Existing structures
- Flood information
- Utility access
- Local land-use rules
- Recorded liens
- Environmental history
- Nearby property sales
Do this research before buying, not after.
Key Takeaways
- Over the counter tax deeds allow investors to buy unsold tax foreclosures without an auction, but thorough research is essential.
- Investors must check for liens, access, and environmental issues before purchasing OTC properties.
- Flipping OTC tax deeds can be profitable if investors understand the reasons these properties did not sell initially.
- Research factors like land-use restrictions, condition, and nearby sales to determine the property’s true value.
- Avoid buying based solely on low prices; investigate why the property reached the OTC list.
Why Should You Check for Environmental Problems?
Environmental problems can turn cheap property into an expensive liability.
Past uses matter. A vacant parcel may once have contained a gas station, repair shop, industrial business, storage tanks, or another use associated with contamination.
The Environmental Protection Agency describes its All Appropriate Inquiries process as an evaluation of a property’s environmental conditions and possible contamination liability.
For a property with a questionable history, a professional environmental review may make sense before taking title.
Do not assume vacant land means clean land.
Is This Over-the-Counter Property Worth Flipping?
Work backward from the resale price.
Find comparable nearby sales first. Then subtract every cost you expect before deciding what you can pay.
Your calculation may include:
Expected resale price
-minus purchase price
-minus county fees
-minus title work
-minus legal costs
-minus cleanup or repairs
-minus holding costs
-minus selling costs
equals your estimated profit
A property offered for $500 is not automatically better than one offered for $5,000. The $500 parcel could have no practical resale market.
Price is only one part of the deal.
What Is the Biggest Mistake With OTC Tax Deeds?
The biggest mistake is buying because the property appears unusually cheap.
A $100 or $500 listing can make investors move too quickly. The better question is not, “How cheap is this property?”
Ask:
“Why did nobody buy this property before it reached the OTC list?”
Then research that question until you have an answer.
This simple change in thinking can help you avoid many bad purchases.
A Simple Over the Counter Tax Deed Research Process
Before buying an OTC property:
- Confirm the parcel number with the county.
- Find the parcel on the county GIS map.
- Review assessor and tax records.
- Confirm legal road access.
- Check land-use and building restrictions.
- Review recorded liens and title issues.
- Check flood and environmental records.
- Inspect the property or get current photos.
- Research comparable property sales.
- Calculate your maximum purchase price.
- Confirm the county’s OTC purchase procedure.
- Get professional title or legal help when the risk justifies the cost.
Never skip research simply because the purchase price is small.
Frequently Asked Questions
Yes, in some counties. Properties that fail to sell at auction may later become available through an OTC process. The rules vary by state and county, so confirm availability directly with the government office managing the property.
They can be, but a low asking price does not mean the property has equity. Research access, title, condition, land use, and nearby sales before deciding whether the price makes sense.
Do not assume they do. Tax deed title rules vary by state. Other claims or title defects may require additional legal work before you can obtain marketable title or resell the property.
That depends on the state’s tax sale laws, the deed you receive, title conditions, and the buyer’s requirements. Some properties may need additional title work before a traditional buyer or title company will accept them.
They can work for beginners who are willing to research each parcel carefully. Start with properties you can understand and verify. Avoid buying solely because the county’s asking price appears low.
Final Thoughts
Flipping over-the-counter tax deeds can work, but finding a cheap property is only the first step.
The stronger deals tend to be the ones where the investor understands why the property went unsold, confirms the title, researches the land, checks its physical condition, and knows who may buy it next.
Treat every OTC list as a research list, not a shopping list.
That approach can help separate usable properties from parcels that may cost more than they are worth.
Want to learn more about how tax liens and tax deeds work? Tax Lien School has free resources that cover property research, auctions, and tax sale investing.
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