As Detroit struggles to boost home values, they’re trying something new. Now, the city is set to launch a website to auction off homes that were seized in tax foreclosures. The site (buildingdetroit.org) began on April 14 with 15 listings for homes to be auctioned on May 5.
Opening bids begin at only $1,000, but winners are required to fix the home up quickly and have a tenant within six months. Should they fail to meet these requirements, they lose the house and their money.
Mayor Mike Duggan hopes that the site will take care of some of the abandoned homes littering the city. The hope is that so many homes will be renovated that more people will be willing to commit to purchasing similar homes in similar areas, leading to an overall increase in property values.
Currently, there are 16,000 vacant homes in Detroit as a result of tax lien foreclosures, and the shabby neighborhoods were doing nothing to encourage renovation or growth. When individuals and families see no future on the block they live on, they’re more likely to walk away from a neighborhood without a second thought.
To qualify for a sale, a person or business must be a resident of Michigan with no prior blight or building code violation and no tax foreclosures. Within 72 hours, they’ll also have to come up with a 10% down payment, close and make a full payment within 60 days for houses under $20,000 or 90 days for houses over $20,000.
Once the house is acquired, the new owner must begin house renovations within 30 days and submit reconstruction plans with the Detroit Land Bank Authority, who hopes to avoid speculators and instead find diligent buyers hoping to make money by working hard.
On April 27, the 15 initial homes in the program will be available for touring for interested buyers.
While Jason Hartman recommends buying quality homes, the idea of renovating and reclaiming an entire neighborhood through rigorous renovation requirements is an interesting one. Would you consider taking such a risk? (photo credit: Thomas Hawk via photopin cc)