Donley County, Texas Redeemable Tax Deed: Your Guide to Local Tax Sales

Introduction to Donley County and this guide

Donley County lies in the eastern Texas Panhandle. It covers roughly 933 square miles of rolling prairie and rangeland. Clarendon, nicknamed “Saints’ Roost,” is the county seat and sits about 70 miles southeast of Amarillo. This guide answers common questions about Donley County’s tax sales. You will learn when auctions occur, how to register, and what makes the county’s redeemable tax deeds an appealing investment. Whether you are a local or an out‑of‑state investor, the sections below will help you navigate the process and avoid pitfalls.

Overview of Donley County’s tax lien/deed investing

Texas is a redeemable tax deed state. When property owners fail to pay taxes, the county auctions the property itself rather than just a lien. The winning bidder receives a deed, but former owners have a chance to buy it back (redeem) for a limited time. According to an overview of Texas foreclosure law, foreclosure sales are held on the first Tuesday of every month between 10 a.m. and 4 p.m. at the county courthouse. The auction is live, and the highest bidder wins; payment is typically due the same day. If a property is redeemed, investors earn back their bid plus penalties defined by state law.

Important Details

Item	Information
Tax Sale Type	Texas uses redeemable tax deeds, so the property is sold but can be redeemed for a limited period.
Typical Sale Date	Sales occur the first Tuesday of each month. Notices posted by Donley County list dates such as May or November.
Sale Time (CT)	Auctions begin around 10 a.m. Central Time and must start no later than three hours after the announced time.
Redemption Period	Most properties: 6 months; homestead and agricultural land: 2 years.
Interest/Penalty	If redeemed within six months, investors receive 25 % of the bid amount; if redeemed in the second year, they receive 50 %.
Bid Procedure	Live, open auction. Starting bid equals taxes and fees owed. Highest bidder wins; cash or cashier’s check required.
Deposit	Counties often require proof of funds or a Statement of No Delinquent Taxes before bidding; bring a cashier’s check for the full amount.
Registration	Registration and issuance of bidder numbers occur before the auction begins; once bidding starts, no new registrations are allowed.
Auction Location	Donley County Courthouse, 300 Sully Street, Clarendon, TX 79226.

Note: the county’s website posts notices of upcoming sales. For example, recent notices include May 1 and November 4 sales on the courthouse steps. Always check the county site for the next sale date.

Fun Facts About Donley County

• Historical roots: Donley County was named for Stockton P. Donley, a pioneer lawyer. Methodist minister Lewis Carhart founded Clarendon as a sobriety colony; cowboys dubbed it “Saints’ Roost”. When the railroad bypassed the original settlement in 1887, residents moved the town to its current site.
  
• Ranching legacy: Charles Goodnight and John Adair established the massive JA Ranch in the region during the 1870s. Cattle raising remains an economic mainstay, along with crops like cotton and wheat.
  
• Small population: The county has about 3,300 residents, and roughly 75 % of households own their homes.
  
• Economic profile: The largest employment sectors are educational services, agriculture and health care. Manufacturing and wholesale trade provide the highest median earnings for men, while women earn most in services and finance.
  

Attractions & Economic Highlights

Donley County’s recreational and cultural sites enhance quality of life:

• Outdoor recreation: Greenbelt Lake, created in 1968, supplies water to several cities and offers fishing, camping and boat ramps. Kincaid Park, Sandy Beach and Lakeside Marina provide camping sites and permits for visitors.
  
• History and culture: The Saints’ Roost Museum in Clarendon occupies the 1910 Adair Hospital and preserves artifacts from the pioneer era. Visitors learn about Cornelia and John Adair, Charles Goodnight, and the historic JA Ranch.
  
• Architecture: The Donley County Courthouse (1890s) and St. John’s Baptist Episcopal Church—Texas’s oldest continuously used church in the Panhandle—draw history buffs.
  
• Transportation: U.S. Highway 287 and State Highway 70 intersect at Clarendon, providing easy access to Amarillo and Dallas/Fort Worth.
  
• Economy: Agriculture dominates, with cattle, cotton, peanuts and hay producing over $73 million in agricultural revenue. The county also benefits from Clarendon College, tourism around Greenbelt Lake, and limited natural‑gas production.
  
• Community lifestyle: Residents enjoy fishing, hunting and small‑town events at the annual Saints Roost Celebration. The short 16‑minute average commute means more time for family.
  

Why Donley County is Ideal for Redeemable Deed Investors

Donley County combines low property prices with stable rural demand. Median property value is around $90,500, far below the national average. A high home‑ownership rate of over 75 % indicates pride of ownership, but delinquent properties still surface. Investors can enjoy high returns with relatively low risk because Texas law guarantees a 25 % penalty if the property is redeemed within six months and 50 % if redeemed in year two. Compared with bank accounts or bonds, these returns are generous. The long redemption period for homesteads and farms (two years) increases the likelihood of owners redeeming, thus increasing your penalty earnings.

Auction Process for Tax Lien/Deed Sales

The Donley County tax sale process follows statewide rules. Here is how it works:

How the Auction Works

1. Notice and listing: The county posts a notice of each sale at least 21 days before the auction. Notices are available on the county website and may be published in a local newspaper. Each notice shows the property, minimum bid, and date/time.
   
2. Registration: Bidders must obtain a Statement of No Delinquent Taxes from the tax assessor‑collector and present it on sale day. Registration takes place the morning of the sale. According to Texas foreclosure guidance, registration ends when the auction begins. Bring government‑issued ID and sign the bidder’s list.
   
3. Opening bids: The auctioneer (often the sheriff or constable) announces each parcel. Bidding starts at the amount of taxes, penalties and court costs owed. Only registered bidders may participate.
   
4. Bidding format: Donley County uses a live, ascending format. The highest bid wins. Bidders raise their number to place a bid. The auctioneer repeats amounts until no higher bids are offered.
   
5. Payment: Winning bidders must pay immediately after the sale using cash, certified funds or a cashier’s check. Payments are made to the sheriff’s or constable’s office. Some counties require a deposit at registration; check with Donley County for current requirements.
   
6. Sheriff’s deed: After payment, the purchaser receives a sheriff’s deed. Record it with the county clerk to begin the redemption period. No warranties are provided; properties are sold “as is”.
   

Because Texas uses redeemable deeds, investors may not obtain possession immediately. The former owner can redeem the property within the specified period by paying your bid plus penalties and allowed costs. If redemption does not occur, you own the property outright once the redemption period ends.

Maximum Potential Returns and Expected Returns

Returns depend on redemption timing and final resale value. If the property is redeemed:

• 25 % penalty within six months: For example, a winning bid of $10,000 would yield a $2,500 return when the owner redeems within six months. Even if the owner redeems after a few days, you still earn 25 %.
  
• 50 % penalty in year two: For homesteads and agricultural property, redemption may occur up to two years later. A $10,000 bid would earn you $5,000 if redeemed after one year.
  

If the owner does not redeem, you can take possession after the redemption period and sell or rent the property. Donley County’s median property value of $90,500 suggests room for appreciation if you buy at a low bid. However, investors should factor in costs to clear title, repairs and any senior liens.

Open to All Investors / Foreign Investor Participation

Texas auctions are open to residents and out‑of‑state investors. There is no state requirement that bidders be U.S. citizens, although you must provide identification and may need a U.S. tax identification number to record the deed. However, recent legislation (Senate Bill 17) restricts property purchases by citizens or entities from certain countries beginning in late 2025. Investors from other nations remain welcome, but they should consult legal counsel if they have ties to countries on the restricted list. Online bidding is not currently offered in Donley County, so foreign investors must appear in person or appoint a representative with power of attorney. Always stay up to date with federal rules such as FIRPTA, which imposes withholding on gains when foreign sellers dispose of property.

What Due Diligence Entails

Steps to Perform Due Diligence

Due diligence protects you from buying problematic property. Before bidding:

1. Research the parcel: Examine the property’s legal description, address and photos (if available). Drive by to confirm its condition.
   
2. Check title: Search the county clerk’s records for mortgages, liens, judgments or easements that may survive the tax deed. Tax sales wipe out junior liens but not senior mortgages, IRS liens or HOA liens.
   
3. Estimate costs: Factor in unpaid taxes, court costs, potential improvements, and insurance during the redemption period.
   
4. Assess market value: Compare comparable sales to determine if the property has resale potential. Use local real estate listings and speak with agents familiar with the area.
   
5. Verify zoning and occupancy: Ensure the property is zoned for your intended use and determine whether it is occupied. Eviction processes can be costly and time‑consuming.
   

Risks of Skipping Due Diligence

Failing to research can lead to unpleasant surprises. Hidden liens may survive the sale, making the property more expensive than expected. Structures could be dilapidated or uninhabitable, requiring costly repairs. Sometimes the property described in the notice does not exist as pictured; a vacant lot may have no access road. Occupied properties come with tenants who may need to be evicted through court. Without due diligence, investors risk losing money or becoming entangled in legal disputes.

Buying Over‑the‑Counter (OTC) Liens/Deeds in Donley County

Properties that do not sell at auction are “struck off” to the county. After the auction, the county may offer these parcels over‑the‑counter (OTC). To purchase OTC properties:

How to Purchase OTC Liens/Deeds

1. Request the strike‑off list: Contact the Donley County tax assessor‑collector to obtain a list of unsold properties.
   
2. Select a property: Review each parcel’s description, assessed value and redemption status.
   
3. Make an offer: You can often purchase OTC deeds for the minimum bid (taxes and costs) without competitive bidding.
   
4. Complete paperwork: Submit your payment by cashier’s check and sign the deed transfer. The redemption period still applies.
   

Benefits of OTC Purchases

• No bidding wars: You avoid the pressure of live auctions and can take time to research.
  
• Fixed costs: Prices are usually set at the amount of taxes owed and costs, so you know your investment up front.
  
• Better due diligence: With no auction deadline, you can thoroughly inspect titles and property conditions.
  

Why Donley County is a Top Choice for Tax Deed Investors

Economic and Tax Advantages

Donley County’s economy revolves around cattle, crops and education, producing roughly $73 million in agricultural revenue. Low property values and a small population create frequent tax delinquencies, giving investors a steady stream of opportunities. The county offers a friendly business climate and has no state income tax. Strategic highways connect Clarendon to major metros, easing future resale or development. Investors also benefit from the state’s generous penalty structure (25 %–50 %) for redeemed properties.

Real Estate Market Overview

Homes in Donley County are affordable, with a median value near $90,500. The homeownership rate is high, and vacancy rates are low. Delinquent properties often include vacant land, older homes and occasional commercial sites. Demand remains steady because the county’s population has stabilized after years of decline, and Clarendon College attracts students and staff. Investors who acquire deeds cheaply can resell at market value after the redemption period or hold for rental income.

Conclusion

Donley County’s redeemable deed auctions offer attractive yields for investors willing to do their homework. Sales occur on the first Tuesday of each month at 10 a.m. Central Time at the courthouse, and bidders must register beforehand and bring certified funds. Properties are sold as is and may be redeemed within six months or two years, yielding a 25 %–50 % penalty to the investor. The county’s low real‑estate prices and stable agricultural economy make it a worthwhile location to explore. Before bidding, investors should perform thorough due diligence, budget for repairs and legal costs, and consult professionals when necessary. With careful planning, Donley County’s tax sales can provide high returns and a foothold in Texas real estate.

Pro Tips

• Get the right certificate: Obtain a Statement of No Delinquent Taxes from the tax assessor‑collector before sale day. Without it, you cannot register.
  
• Inspect in person: Visit properties if possible. Rural parcels can be far from utilities or roads, increasing costs.
  
• Plan for redemption: Investors cannot immediately evict occupants. Budget for insurance, security and possible repairs during the redemption period.
  
• Budget for a quiet title suit: To sell or finance the property after redemption, you may need to file a quiet title action. Set aside legal fees.
  
• Work with local experts: Partner with a local real estate agent or attorney to understand zoning, mineral rights and agricultural leases.
  

Frequently Asked Questions About Donley County Tax Deed Investments

1. Do I need to renovate a redeemed property?
   If the property is redeemed, you no longer own it. The former owner pays your bid plus penalties, and you do not perform renovations. If redemption does not occur, any repair costs are the investor’s responsibility once the redemption period ends.
   
2. How do I clear title after the redemption period?
   Texas tax deeds do not provide marketable title. Investors may need to file a quiet title lawsuit or obtain title insurance after the redemption period. Consult a real estate attorney to determine the appropriate process.
   
3. Are there senior liens that survive the sale?
   Yes. Federal tax liens, IRS liens, some HOA liens, municipal utility liens and recorded mortgages may survive. Always conduct a title search to identify senior liens before bidding.
   
4. Can I finance my purchase or use credit?
   Tax deed auctions require payment by cash, cashier’s check or certified funds on sale day. Traditional mortgage financing is not available at auction. You may finance repairs or refinance the property after you receive clear title.
   

What happens if the property is occupied?
If the former owner or tenants occupy the property after the redemption period, you must follow Texas eviction procedures. According to foreclosure guidance, you must provide a three‑day notice to vacate and may need to file for forcible detainer in Justice Court. Evictions can delay your ability to take possession.

Useful Links

• Auction Calendar
• How to Profit from Texas’s Redeemable Deeds
• Let’s talk about redeemable tax deeds and how you can profit from them!
• Discover Tax Deeds and how you can find property for as little as $50! 
• Learn How to maximize profits at the Texas Tax Sales

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Looking at Donley County for your next investment? Our Auction Calendar has what you need. Browse tax-sale listings, read through our free resources to gain clarity, and Book a call with our expert team when you’re ready to talk strategy or get personalized help.

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About Dustin Hahn

Dustin Hahn is a Tax Lien & Deed investor with over 22 years of experience and hundreds of deals under his belt. He created Tax Lien School.com to help you buy Tax Deeds up to 90% off mortgage free and earn up to 36% ROI with Tax Liens. This site was voted the “Most Useful Resource” for new investors. Dustin’s YouTube Channel is the #1 Channel on Tax Liens & Deeds with over 98,000 Subscribers and 3600 videos to help you start. “The Best Time To Start Real Estate Investing Was 20 Years Ago, The Second Best Time Is TODAY!”

20+yrs

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