Detroit has had a program for some time to sell blighted homes for $1,000. The sales continue, with dozens of homes available at the Building Detroit website. As the city bulldozes tens of thousand of homes, a small handful will be refurbished by people who buy them at auction.

The majority of homes put up for auction have fewer than 2,000 square feet of space, and many have well under 1,000. Although most have three bedrooms, or less, a small number have four. Almost all are in the worst parts of the city, many south of W. Davison, one of the city’s major thoroughfares.

The homes are actually not easy to buy, because of a large number of restriction which face owners:

 

• You must be a Michigan resident, a non-Michigan resident who will live in the property after rehab, or a company or organization authorized to do business in Michigan.

• You, or any legal entity in which you have an ownership interest, cannot have unpaid delinquent property taxes on properties located in Wayne County, or have lost property to back taxes in Wayne County in the last three years.

• You, or any legal entity in which you have an ownership interest, cannot have material unresolved blight or code violations in the City of Detroit.

• You cannot have won a previous auction and then failed to make the down payment, close on the purchase, or satisfy the conditions of bringing the property up to code and having it occupied within 6 months 9 months for homes located in a historic district).

And, there are a number of hurdles for auction winners:

• Within 30 days after closing, you must provide the Land Bank an executed copy of a contract to rehab the home. If you can demonstrate to the Land Bank you have the skills to rehab the house yourself, within 30 days after closing you must provide the Land Bank with a plan of work and receipts showing you have purchased the materials necessary.

   

• Many of these properties were originally built using lead-based paint, asbestos, or other hazardous materials. If available, environmental reports will be provided to winning bidders. It is recommended that homeowners seek professional advice on how to properly address hazardous materials.

• Within 6 months after closing (9 months for homes located in a historic district), you must provide the Land Bank with a Certificate of Occupancy, or Certificate of Approval for the house and demonstrate that the house has an occupant.

• If you fail to meet these deadlines, you will forfeit both your purchase price and the property,and are forbidden to bid in all future auctions.

Based on a review of past auctions, the city is only selling two homes a day. At that rate, the program hardly qualifies as a way to rebuild Detroit.

 

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