Detroit is auctioning off vacant houses online and they are quite affordable with the starting bid of each property at $1,000. This is part of Detroit’s fight against blight with the end goal in mind of cleaning up the neighborhoods. With houses going at such a cheap price, the new owners will fix them up, which is part of the deal, and in turn bring up the value of homes in the neighborhoods, according to CNN Money News on April 14.
As the result of tax lien foreclosures, the city owns 16,000 properties. These homes, buildings and land were taking away from the original owner who failed to pay the property taxes to the city. Detroit is struggling to get out of bankruptcy and this was a city whose neighborhoods were hit hard during the foreclosure crisis.
The vacant homes are just sitting in various stages of decay and the city cannot afford to keep up with 16,000 vacant properties. The sale of these real estate holdings will benefit the city in three ways. The money the sales generate will help the cash-strapped city and the homes will get a much needed face lift. By looking better, they will no longer drag the real estate prices down for the other homes around them.
City council president Brenda Jones said that folks have walked away from great homes because they thought their neighborhood had no future. This is the beginning of making those neighborhoods a proud place to live in once again.
The online auctions are only open to Michigan residents and companies that have no prior tax lien foreclosures, building code or blight violations. The winning bidders are expected to act within 72 hours by first coming up with 10% down of the winning bid, according to CBS Detroit today.
They then need to make the full payment on the property in 60 days if the purchase price is less than $20,000 or within 90 days if it's more than $20,000. Then the rehab will need to start within 30 days of taking possession of the home, by first submitting reconstruction plans.
The final stipulation is that the buildings must be occupied within six months. This is a serious commitment from the bidder who wins a house auction. The city is making sure that the houses get their much needed face lift. If you don’t follow the guidelines and you don't have everything done by the timeline, then your will forfeit the property.
There are currently 15 homes on the website with the city holding open houses on April 27 for serious bidders to take a closer look at what they are about to bid on.
Take a look at the first batch of houses online just waiting for bids here on the Building Detroit website.