Detroit Auction for Houses

Posted by Steph Kaye on Wednesday, March 11th, 2015 at 6:29pm.

Things To Know

Sixty-two thousand properties went to foreclosure in Detroit this year over unpaid taxes. About half of these properties will likely be auctioned for $500 apiece this fall.
Buying homes or vacant lots for $500 sounds inviting, even in a city as troubled as Detroit. After all, look at New York: Decades of crime and decay gave way to a real estate boom that has revitalized even outlying working-class neighborhoods. Properties that sold for thou
sands in the old days are now worth millions.

But there are no guarantees. "The opportunities are there but there are huge challenges," said Dang Duong, a law and business student at the University of Michigan who has bought and renovated several dilapidated homes in Detroit. "If you're under the impression you can buy a property for $500 and wait a few years until Detroit has recovered, that's going to be difficult."

Here are five things to consider before buying a foreclosed property in Detroit.


Are you prepared to evict the former owners, longtime tenants or even squatters? Loveland Technologies, a mapping company that has surveyed every property in Detroit, estimates that half the properties facing foreclosure are currently occupied, housing about 100,000 Detroiters.

Critics question the morality of buying occupied homes and fear the program may increase Detroit's homeless population. Many owners stopped paying taxes because they weren't getting city services in return. Others say those who failed to pay taxes actually contributed to Detroit's troubles.
Darin McLeskey, who moved from an engineering career to buy, sell and develop real estate in Detroit, says sometimes "people want out. They can't a
fford the home or are tired of living in the city. Mentally they may have moved on, and sometimes physically they have moved on." In one case, he made a "cash for keys" deal with a squatter in an uninhabitable home: "I gave him $300, he signed a document. It was cheaper, easier and more amicable than an eviction."


Demolishing dilapidated properties and building from the ground up can sometimes be cheaper than rehabbing. But some buyers choose renovation to save historic architectural details found in much of Detroit's early 20th century housing stock such as turrets, gingerbread trim, pillars and antique woodwork.

Duong purchased a home in Detroit for $1,100 and spent $100,000 on roofing, wiring, plumbing, appliances, drywall, flooring, and new bathrooms and kitchens. He proud to have preserved the 100-year- old maple floors, and wanted a quality renovation to attract good tenants. It's located in a privately patrolled neighborhood near a hospital, so he feels it as a good investment.

Just beware of hidden costs and scams. Properties may come with liens, water bills and back taxes totaling thousands of dollars. It's also not uncommon to hear of homes sold to buyers in other states and countries, with purchase prices rising with every flip.


If you buy a home through the Detroit Land Bank, you have just six months to bring it up to code — nine months for historic properties. The policy discourages speculators from buying and then leaving the property unattended. Duong received a call before one of his projects was complete, but he said "if you are a legitimate landowner, they are easy to work with. They want people to either renovate the home or sell it to someone else who can do it. That goes a long way to removing blight."

Looting and vandalism are also major problems in Detroit. Homes under renovation risk having fixtures ripped out and tools stolen if the property is not occupied and secured. McLeskey moved tools into a townhouse and returned the next morning to find the door had been knocked down with a battering ram.

It helps to buy in populated areas. The more neighbors you have, the more secure it is.
Combatting blight also means maintaining vacant lots. McLeskey mows all of his 40 vacant lots during the summer.


Garbage pickup, snow removal, water service, and police and fire department responses have improved in the last 18 months, but may still be less reliable than what you'd expect them to be.


Are you willing to be involved in a controversy? Supporters of the plan say foreclosure sales help the city recover by forcing homeowners to pay up or move on. Auction buyers then decide what's salvageable. Detroit covers over 140 square miles, and officials would like to concentrate the population of 690,000 (down from 1.85 million in 1950) into a smaller, sustainable area by demolishing abandoned buildings in far-flung neighborhoods. Theoretically, new property owners will pay property taxes, the revenue will support city services, and property values will recover.

But critics say foreclosures may actually increase blight. Repossessed properties often don't sell at auction and they deteriorate faster once occupants have left. 

If you are in the market for a new house and would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you. 

Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Lang Premier Properties. See what past clients have to say about Stephanie Lang.  Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.

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