Apr 16, 2026
For many Americans hoping to buy their first home, the housing market can feel like a locked door. Prices remain stubbornly high, mortgage rates are still elevated (1) and bidding wars have become routine in many cities (2).
For some buyers in Southern California, though, an unusual opportunity may be opening, through a government auction of tax-defaulted properties.
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Next month, Riverside County, Calif., will auction more than 800 parcels of tax-defaulted property in an online sale running from April 23-28. The listings include a mix of vacant land and homes, with some parcels starting with bids as low as $100.
For prospective buyers Naomi and Randy McSwain, who are currently renting in Moreno Valley after struggling to find something affordable, the auction represents a rare chance to finally enter the market.
"We aren't looking for much," Naomi McSwain told NBC Los Angeles. "Not a mansion, just something comfortable and affordable [where] we can spend the rest of our years (3)."
But while these auctions can open the door for buyers who've been priced out, they also come with serious risks that many first-time buyers underestimate.
What tax-defaulted homes actually are
A tax-defaulted property is real estate where the owner has failed to pay the required property taxes for long enough that the local government has formally placed it into tax-default status and begun enforcement actions to collect. When those taxes go unpaid long enough — often five years or more, depending on state law — counties can move to recover the debt by auctioning the property to new buyers.
The process is surprisingly common across the United States. Counties in states such as California, Florida, Texas, Arizona, Georgia and Michigan hold recurring tax sales to enforce and recover unpaid property taxes. In these auctions, some lists consist mostly of vacant land, while others also include houses, commercial buildings and rental properties.
In Riverside County's upcoming auction, officials say they expect more than 800 parcels to be listed, though property owners still have until April 22 to redeem their property by paying their overdue taxes. If they do, the parcel is removed from the sale.
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Can these homes really help buyers break in?
In theory, tax auctions can provide a rare path into home ownership, especially in high-cost markets.
Zillow says the March 31 median list price of a U.S. home was $394,933, and in many parts of California the median price is several times higher (4). That combination of high prices, elevated mortgage rates and competition from all‑cash investors has pushed home ownership out of reach for many would‑be buyers.
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Tax auctions sometimes offer lower entry points because the county's goal is simply to recover unpaid taxes, not maximize a home's market value. But that doesn't mean bargains are guaranteed. Many properties at tax auctions are vacant land, damaged homes or properties with legal complications. And when desirable homes do appear, investors often drive prices up quickly.
That's one reason the McSwains say bidding can be intimidating. Investors frequently show up with cash offers ready to deploy, something most buyers can't easily match. Traditional mortgage financing or home loans may not be available for these properties — at least not right away — so people will need to secure their own financing with a lender if they cannot pay in cash (5). Still, some buyers do manage to secure homes below market value, particularly if they're willing to take on repairs or navigate complicated paperwork.
What buyers need to know before bidding
Tax-default auctions can move quickly, and they come with strict rules that buyers must understand before participating.
In Riverside County's case, buyers must register in advance and submit a $5,000 deposit before the auction begins. Bidding increments start at $100, and the properties are sold "as is."
That part is critical. In tax‑defaulted sales, buyers usually cannot inspect the inside of the home and counties almost never guarantee the property's condition. Properties may have serious problems, including structural damage, remaining occupants, unresolved liens or other title and boundary issues.
Winning bidders also often need to pay quickly, sometimes within days, and frequently in cash.
Experts recommend researching every property carefully before bidding. That can include reviewing county records, checking zoning rules, driving by the property and estimating repair costs. Skipping that homework can lead to expensive surprises.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Experian (1); Business Insider (2); NBC Los Angeles (3); Zillow (4); Park Place Finance (5)
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Chris Clark is a Kansas City–based freelance contributor for Moneywise, where he writes about the real financial choices facing everyday Americans—from saving for retirement to navigating housing and debt.
