Over-the-Counter Tax Liens: How to Buy Leftover Certificates With No Auction

What are over-the-counter tax liens?

When a county holds its annual tax-lien sale, investors bid on certificates that represent the delinquent taxes owed on a property. But not every parcel attracts a bidder. Certificates that receive no bid are "struck to the county" — the taxing authority effectively holds them itself. Rather than warehouse those liens forever, most counties make them available for direct purchase afterward. That direct-purchase inventory is what investors call over-the-counter, or OTC, tax liens.

The defining feature of an OTC lien is that there is no competitive bidding. You are not fighting other investors and you are not bidding the interest rate down. You pay the face amount of the delinquent taxes (plus any accrued interest and fees) and the certificate is assigned to you at the rate fixed by state law. In lien states this is usually the statutory maximum.

Why certificates end up on the OTC list

A certificate can go unsold for several reasons, and not all of them are bad. Sometimes the parcel is obscure — a landlocked sliver, an unbuildable easement, or a mobile home with no land. Sometimes the auction simply had light attendance that year. And sometimes strong parcels slip through because there were more certificates than bidders in the room.

That mix is exactly why OTC lists reward diligence. The list is a haystack: it contains genuine bargains sitting next to worthless scraps of dirt. Because no one bid, no one else did the homework for you. The burden of separating the two is entirely on the buyer.

The interest rates you can earn

Because OTC liens are typically assigned at the statutory maximum, the advertised return can look attractive. Rates vary widely by state:

• •Florida — county-held certificates are available at the 18% statutory maximum (though redemptions carry a 5% minimum penalty).
• •Arizona — state certificates of purchase can be bought by assignment at the 16% maximum.
• •Iowa — carries a high statutory rate of 2% per month (24% annualized).
• •Other lien states such as Colorado, Mississippi, and Maryland maintain county-held or "struck-off" lists with their own statutory rates.

How to buy OTC tax liens step by step

The mechanics are usually simpler than a live auction, but they differ county by county. A typical workflow looks like this:

• •Request the county-held or "lands available" list from the county treasurer or tax collector — many post it online and update it monthly.
• •Screen each parcel: pull the assessed value, confirm it is a real, usable property, and check what other liens or code violations may exist.
• •Confirm the payoff amount, which includes back taxes plus accrued interest and administrative fees.
• •Submit the purchase or assignment request with payment, often by mail, in person, or through an online portal.
• •Track the redemption clock and, if the owner never redeems, follow the state's process to eventually foreclose or apply for a deed.

The hidden risk: cheap is not the same as safe

The reason a certificate reached the OTC list is a data point, not a bargain signal. If a parcel is environmentally contaminated, sits in a FEMA flood zone, is worth less than the taxes owed, or is buried under municipal liens that survive the process, a 16% or 18% rate means nothing — you may never be repaid and you may not want the property if you foreclose.

This is precisely where a disciplined pre-bid review pays for itself. Evaluate the risk before you commit capital, not after. The goal on an OTC list is not to buy the cheapest lien; it is to buy the lien on a property you would genuinely be happy to own if the owner never pays.

OTC tax liens vs. OTC tax deeds

Deed states have a parallel concept. Parcels that do not sell at a tax-deed auction often move to a "lands available for taxes" or surplus-land list, where the county sells the property itself over the counter. The screening discipline is the same, but the stakes are higher: with an OTC deed you are buying the real estate directly, so title problems and survived liens land on you immediately rather than after a redemption period.

Whether you are buying a leftover certificate or a leftover parcel, the winning move is the same — treat "nobody wanted this" as a question to answer, not a discount to celebrate.

Over-the-Counter Tax Liens FAQ