Property Auction Question

**DetroiterOnTheWestCoast** · August-28-13, 09:54 PM

While playing around on the "Why Don't We Own This" website, I have noticed a few homes up for auction like this one in EEV, shown as having been sold for very small amounts after the market crashed. I'm just having a problem figuring out how a house could be lost for taxes a few years after having been bought so cheaply. http://whydontweownthis.com/2013/mi/...9651/-82.92978

**ndavies** · August-29-13, 08:35 AM

The problem is the Assessment doesn't automatically change when the house is sold. The assessment on this house claims to be $37000. That means the city values the house at $75000. With Detroit's millage rate being 67, that puts the taxes at about $2500 a year if homesteaded. You would have to challenge the tax assessment at both the city and state level to get the tax assessment in line with the sale price. If you bought the house for $10000 you would be paying out 25% of it's value every year in taxes. Detroit's absurdly high tax rates and pre market crash hyper inflated assessments are neighborhood killers.

**gvidas** · August-29-13, 08:47 AM

Maybe by this time next year Amazon.com and Bernard J Youngblood will partner, and you can get all the full-service features of conventional online shopping in your auction experience. I expect nothing less than a functional "look inside!" feature.

Until then, it's at best foolish, at worst immoral, to bid on properties without having knocked on the front door and walked all the way around them on foot yourself. Real estate in Detroit is bizarre, and destruction happens fast. If you own something, and don't maintain it or use it, then you are just another parasite. This goes as much for vacant lots as buildings.

If you're going to put a bid in on something, beyond the basic due diligence of rolling your eyeballs across all four walls of your new job, you should at a minimum look up everything the Wayne County Registry of Deeds has on the property. Plan on spending $20 just learning their system, and then another $10-40 per property, depending on how convoluted the history is. And you, or a close friend, should learn how to interpret [[or at least search by) parcel ID and plat/liber/lot, to confirm that you are actually bidding on what you think you are bidding on.

From where I sit, complete due diligence would also include a trip to the BSE&E demo department, to ask whether it is on any of their lists; a trip to the water board, to ask what [[if any) unpaid balance is on the account at that address; and a walkthrough with a skilled, unbiased [[i.e. not your best friend/spouse) carpenter/contractor to estimate how much work the building needs.

**poobert** · August-29-13, 10:33 AM

Originally Posted by DetroiterOnTheWestCoast

While playing around on the "Why Don't We Own This" website, I have noticed a few homes up for auction like this one in EEV, shown as having been sold for very small amounts after the market crashed. I'm just having a problem figuring out how a house could be lost for taxes a few years after having been bought so cheaply. http://whydontweownthis.com/2013/mi/...9651/-82.92978

It's actually pretty simple.

Some people just don't pay their bills. If you got a house for under 30k in EEV even at the lowest end of the market, chances are it was trashed and needed a lot of work.

Instead you had some ghetto trash pool their money together, buy the house cheap, never do any work, live in squalor, and now they're getting foreclosed for literally never paying taxes. Good riddance, I say.

You also had investors do the exact same thing. There is one on my block. A suburbanite scum slumlord bought two houses at the low end of the market, never did any work, collected rent for a few years from other ghetto trash who made the places worse, and is now losing the houses to taxes. What does he care? He got 4 years of rent, tax free!

Of course Wayne County is beyond useless. What are they doing to prevent this from happening again? Why are there no safeguards to see that these properties go to owner occupants with good incomes?

Thankfully the market has finally rebounded a bit, and as I have alluded to, the losers are being weeded out.

**Novine** · August-29-13, 11:06 AM

"Of course Wayne County is beyond useless. What are they doing to prevent this from happening again? Why are there no safeguards to see that these properties go to owner occupants with good incomes?"

Blame the state. The County doesn't have much say in how the process works. State legislators like to protect scrappers and slumlords.

**getmoore** · August-29-13, 12:10 PM

Originally Posted by poobert

It's actually pretty simple.

Some people just don't pay their bills. If you got a house for under 30k in EEV even at the lowest end of the market, chances are it was trashed and needed a lot of work.

Instead you had some ghetto trash pool their money together, buy the house cheap, never do any work, live in squalor, and now they're getting foreclosed for literally never paying taxes. Good riddance, I say.

You also had investors do the exact same thing. There is one on my block. A suburbanite scum slumlord bought two houses at the low end of the market, never did any work, collected rent for a few years from other ghetto trash who made the places worse, and is now losing the houses to taxes. What does he care? He got 4 years of rent, tax free!

Of course Wayne County is beyond useless. What are they doing to prevent this from happening again? Why are there no safeguards to see that these properties go to owner occupants with good incomes?

Thankfully the market has finally rebounded a bit, and as I have alluded to, the losers are being weeded out.

Well now they're enforcing a clause in the deed that states that if the properties are not kept out of delinquency it reverts back to the county. Since buyers are responsible for current years taxes the properties can be taken back within a few months of winning an auction. They should have done that long ago!

**sumas** · August-29-13, 09:37 PM

Good thoughts by all. I guess I am being simple but owner occupied auction stipulations would be nice.

Still can't believe the townhouses bought by New yorkers trying to make buck is a total burnt out mess now.

**Eber Brock Ward** · August-30-13, 08:58 AM

Here's another question: does the property tax auction affect comps for financing/refinancing a property?

Or not, because it's entered as a quit claim deed to the auction winner.

**Spartan** · September-25-13, 10:45 AM

Anyone know what's so special about this property? Highest bid in the entire auction [[$166K) but it looks like it's just a tiny little lot and auto sales building in NE Detroit, not near much.

http://whydontweownthis.com/2013/mi/wayne/226907#18/42.40736/-83.05561

**downtownguy** · September-25-13, 12:47 PM

Originally Posted by Spartan

Anyone know what's so special about this property? Highest bid in the entire auction [[$166K) but it looks like it's just a tiny little lot and auto sales building in NE Detroit, not near much.

http://whydontweownthis.com/2013/mi/wayne/226907#18/42.40736/-83.05561

Proposed site of Cheesecake Factory.

**DetroiterOnTheWestCoast** · September-25-13, 12:53 PM

FYI, I checked the EEV property that first prompted me to start this thread. It never made it to the auction as it was withdrawn. Does that mean the owners paid the taxes or worked out a payment plan?

**Gushi1124** · September-25-13, 04:01 PM

Furture home of a Coney Island, lol

Originally Posted by Spartan

Anyone know what's so special about this property? Highest bid in the entire auction [[$166K) but it looks like it's just a tiny little lot and auto sales building in NE Detroit, not near much.

http://whydontweownthis.com/2013/mi/wayne/226907#18/42.40736/-83.05561

**getmoore** · September-25-13, 08:51 PM

Originally Posted by DetroiterOnTheWestCoast

FYI, I checked the EEV property that first prompted me to start this thread. It never made it to the auction as it was withdrawn. Does that mean the owners paid the taxes or worked out a payment plan?

Yep exactly. A lot of the ones I had my eye on are gone too.

**marshamusic** · September-28-13, 09:42 AM

Originally Posted by DetroiterOnTheWestCoast

FYI, I checked the EEV property that first prompted me to start this thread. It never made it to the auction as it was withdrawn. Does that mean the owners paid the taxes or worked out a payment plan?

Originally Posted by getmoore

Yep exactly. A lot of the ones I had my eye on are gone too.

I attended two meetings of the Why Don't We Own This? folks, one at Omnicorp [[Eastern Market) and one at Loveland [[Wash. Blvd.); both times they explained that this does happen. I was glad to hear that; folks given a last chance to keep their homes.