One thing I have noticed is that lien buyers are concerned with total ($) owed on each lien. That is to say our customers only want leads with totals above a specific amount, usually $10,000. One might assume that states such as California and New York would have the highest totals. Debtors in these bigger, wealthier states would, of course, owe more money on average, but surprisingly that is not the case. In fact, Louisiana and Arkansas have the highest median lien totals. And Delaware, due to the propensity for larger companies to incorporate there, as well as Nevada, perhaps due to the abundance of casinos, have the highest average lien totals. Below are 3 graphs depicting the median and average amounts on Federal liens filed between 1990 and 2013.
Since a lot of larger companies are incorporated in Delaware, it is not shocking that Delaware towers above the rest with an average lien amount of just under $400K. Average lien totals are somewhat skewed since a handful of very high total liens can inflate the average. However, I think our hypotheses regarding Delaware and Nevada are interesting enough to share.
The state of Florida is the second largest in terms of both population and number of tax liens filed; however, it is in the bottom three for lien amount.
The volume of tax liens filed is correlated to a state’s population, but a state’s population is clearly not correlated with lien totals. So if lien total is important to you, now you know which states to ask for from your vendor. However, due to the IRS’s Fresh Start program (see this blog post) and other factors, we believe prioritizing high total liens is much less important than other approaches. Fresh leads extracted directly from the source and predictive analytics to identify which liens have the highest probability to close are much more important. With appropriate data and analytics, companies are adapting and finding valuable insights in their data which is translating into real revenue. Work smarter, not harder!