Short answer
No, not yet. At a New Jersey tax sale, title to the property is not sold. What is sold is a tax sale certificate, a lien on the property. You can redeem it by paying what is owed, with a redemption penalty. After two years, the certificate holder can start a foreclosure case in Superior Court.
What gets sold
The Division of Local Government Services explains that New Jersey law requires every municipality to hold at least one tax sale per year if it has delinquent property taxes or municipal charges. At the sale, title to the delinquent property itself is not sold. What is sold is a tax sale certificate, a lien on the property. The winning bidder pays the municipality the taxes and interest to date, and receives the certificate.
How the interest works
Tax sale certificates can earn interest of up to 18 percent, depending on the winning percentage bid at the auction. Bidders bid the interest rate down. If the interest is bid down to 1 percent, a premium is bid, which the municipality holds for up to five years. Taxes keep accruing after the sale, and the holder can pay the later taxes, which earn interest at the municipality's rate. If they are not paid, a new certificate may be sold at the next tax sale.
Redeeming
The page says that if the property owner redeems the certificate before foreclosure, the certificate holder earns a redemption penalty of 2, 4 or 6 percent, depending on the amount of the original certificate, in addition to any interest on the certificate. To redeem, contact your municipal tax collector for the exact payoff. The page notes that tax collectors have the details on upcoming tax sales and certificates.
The two-year mark
After two years, the page says a lien holder can begin proceedings in Superior Court to foreclose. If the foreclosure is completed, the name on the deed changes to that of the lien holder, who can then take possession. So a certificate is a deadline to deal with, not the end of ownership. This page was captured in 2011, so ask an attorney whether the timeline or rates have changed.
Selling with a certificate on the house
A sale generally has to clear the certificate and other liens from the proceeds, and a closing attorney can arrange the payoff. Kaizen Home Buyers makes cash offers on New Jersey houses as-is, with no repairs and no agent commission. We can give an offer within 24 hours and close in 14 to 30 days or on the date you choose. Call 267-329-0084. Selling with an agent is another path if there is time. Get a written payoff before you decide.