Rules for Bidding on and Purchasing Properties
Rules for Bidding on and Purchasing Properties
See City Employee Discount Rules
See Rules for Purchasing Side Lots
See Rules for Own It Now Properties.
Welcome to buildingdetroit.org! This is the site to buy properties in the City of Detroit and then fix them up promptly. Here are the rules effective 6/29/15:
- Browse properties online for at least a week before the bidding opens.
- See the properties in person at the scheduled Open House events.
- See a house you like? Then bid on it. To bid, register in two steps:
- Select a bidder name. One word – no spaces may be included. Offensive Bidder names will not be allowed to bid.
- Provide contact information and check the box that you agree to these Rules.
Who can bid?
- 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 WayneCounty 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).
- You are limited to the purchase of one auction property until you have brought the first property up to code and have had it occupied within 6 months (9 months for homes located in a historic district). Once you have demonstrated the ability to meet the terms of the purchase agreement by successfully bringing the property up to code and having the property occupied, you can purchase one property per month. However, you will not be able to purchase any further properties if any property that was previously purchased is not in compliance with all requirements outlined in the purchase agreement. Please note, that this rule limiting the amount of properties that can be purchased may come into effect before the 6 month (9 month) deadline for any property that is purchased and not in compliance as determined by the DLBA. This rule shall also apply to all bidders that have won previous auction bids and have not completed the rehabilitation of at least one property and have it occupied within the required time period.
- If you use a legal entity to purchase the property, you must have an ownership interest in it. This legal entity, and all other legal entities in which you have an ownership interest, is limited to the purchase of one auction property until the legal entity has brought the first property up to code and has it occupied within 6 months (9 months for homes located in a historic district). Once the legal entity has demonstrated the ability to meet the terms of the purchase agreement by successfully bringing the property up to code and having the property occupied, it can purchase one property per month. However, the legal entity will not be able to purchase any further properties if any property that was previously purchased is not in compliance with all requirements outlined in the purchase agreement. Please note, that this rule limiting the amount of properties that can be purchased may come into effect before the 6 month (9 month) deadline for any property that is purchased and not in compliance as determined by the DLBA. This rule shall also apply to all legal entities that have won previous auction bids and have not completed the rehabilitation of at least one property and have it occupied within the required time period.
- Any bidder who misrepresents themselves regarding these qualifications is subject to loss of payments and/or the property.
- In addition, the Detroit Land Bank reserves the right to exclude bidders with a history of delinquent taxes or code violations.
How to Bid
- Each property will be open for sale for only one day. Bidding will be open from 9:00 a.m. until 5:00 p.m.
- If any bid is made within the last 5 minutes that bidding is open, the closing time will be extended by 5 minutes, and extended another 5 minutes each time a bid is made until no further bids are made.
- The bidding will open at $1,000.00. All bids must go up in increments of at least $100.
- To bid, click on the property that you want and then click on “Bid Now”.
- If this is your first bid you will be prompted to provide your credit card information.
- The amount of each bid submitted will be posted immediately on the screen, so that the public knows the current bid at all times, together with the Bidder Name of the current bidder. Bidders areencouraged to refresh their browser screen frequently to ensure that current bid amounts arereflected.
- The DLBA reserves the right to reject any and all bids and either remove a property from auction, or reopen bidding on it at a later date.
Credit Card Processing
- No charge will be made to your credit card at this time.
- Credit card is only charged if you win the bid and fail to pay on time.
- The $1,000 authorization will automatically be released by most credit cards within 2-3 business days for all the non-winning bidders on each property. Please note, you must have an additional $1,000 available credit balance to bid on other properties within the authorization hold period.
- If you win a bid, your credit card will immediately be charged $1,000, which will be applied to yourdown payment. If this $1,000 charge is declined by your credit card company, you will lose your right to purchase the property and will be forbidden to bid in all future auctions.
- Please note that the credit card issuing bank needs to support Address Verification System (AVS) and the address information provided by the bidder as part of the auction registration mustmatch the address on file with the credit card issuing bank.
Automatic Bidding with a Pre-set Maximum
- If you know the maximum amount that you want to bid and don't want to sit at the computer all day, you can enter an automatic bid with a preset maximum amount that is hidden on the website. The computer will then automatically enter bids for you in $100 increments only as needed to top other bidders.
- For example, at 10:00 a.m., you are the winning bidder at $5,000, but you need to go out. You can enter an automatic bid with a hidden maximum of $20,000. When someone else bids $5,100, the computer will automatically enter a bid from you at $5,200. The computer will only enter bids for you as necessary to keep your place as the winning bidder, up to your maximum bid price.
- NOTE: Be sure to double check your bid amount. Once you enter a maximum bid, it cannot be deleted!
- Winning bidders will be notified by email immediately after the auction's close and their credit card will immediately be charged $1,000.00. This amount will be credited toward the winningbidder’s 10% deposit. If the purchase price is $10,000 or less, the $1,000 will be the deposit amount.The winning Bidder Name will be listed on the auction website after the bid closes.
- The email will also contain a web link where you will be able to input the purchaser information necessary for the preparation of your Purchase Agreement.
- Within three business days after winning, you must pay the balance of the down payment, whichis 10% of the winning bid, minus the $1,000 that was already paid. This down payment may bemade either by credit card or by certified check. If your purchase price is $10,000, or less, your$1,000 deposit will be your down payment.
- At the same time, you must submit a signed and notarized Purchase Agreement and return itto the Land Bank for the Seller’s signature.
- If you fail to make the down payment and submit a signed and notarized PurchaseAgreement within three business days, the Land Bank will retain the $1,000 as a penaltycharge and you will lose your right to purchase the property.
Deadline for Closing
- If you are not seeking lender financing for the sale or rehabilitation of the property, you will need to close on the sale no later than 30 days after the winning bid.
- If you are seeking lender financing for the sale or rehabilitation of the property, you mustclose on the sale no later than 60 days after winning the bid. The Land Bank will consider requests for closing deadline extensions on a case by case basis with documentation from the lender that allrequired buyer documentation has been submitted for lender review, and lender requests additionaltime for loan processing and a final loan decision.
- If you fail to close by the deadline, you will forfeit your down payment and the propertyand are forbidden to bid in all future auctions. The Land Bank may offer the property to thenext highest bidder, auction it again at a later date or remove it from the auction.
- Closings will take place at the offices of the Seller’s title company. Electronic closings are notavailable.
Obligation to Promptly Repair and Occupy the Property
- 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 houseyourself, within 30 days after closing you must provide the Land Bank with a plan of work andreceipts showing you have purchased the materials necessary. See following web link Post-ClosingFrequently Asked Questions (FAQ):
- Many of these properties were originally built using lead-based paint, asbestos, or otherhazardous materials. If available, environmental reports will be provided to winning bidders. It isrecommended 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 providethe Land Bank with a Certificate of Occupancy, or Certificate of Approval for the house anddemonstrate 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.
What happens after the Down Payment?
- You will receive a an email forwarding you a copy of the title report and a closing timeline showing items that will be needed to complete the purchase.
- The Land Bank will pay at closing any accrued property taxes due prior to July 1, 2014 (2013 tax year). The winning bidder will not be responsible for them.
- At closing, winning bidder must pay the winning auction price in full (minus your down payment),all closing costs, and the full amount of any property taxes due after July 1, 2014. Winning bidder willthen receive a Quit Claim Deed and become the legal owner of the property. Please note, that the Land Bank does not guarantee clear title to the property (see FAQ for more information).
- You will also be required to sign a contract with the Land Bank in which you agree that within 6 months of closing, the property will be brought up to Code and occupied. If the property is in an historic district or has historic designation, your contract will state that you have 9 months to bring it up to Code and have it occupied.
- In cases where substantial progress has been made, but the repair work is not complete despitethe best efforts of the buyer, the Land Bank, at its sole discretion, may extend the 6 month deadline.
- If you fail to meet these deadlines, you forfeit both your purchase price and the property,and are forbidden to bid in all future auctions.
NOTICE: The Detroit Land Bank Authority advises all potential bidders that it is selling these properties “as is, where is, with all faults” with no representations or warranties of any kind, including but not limited to any warranty of habitability or fitness for a particular purpose. Bidders are advised to conduct their own careful inspection, particularly with regard to the anticipated cost to make the repairs that will be required under the Purchase Agreement to bring a property up to Code within the required 6 month time frame. Any information provided on this website or otherwise, orally or in writing, now or in the future, is for convenience only and the Land Bank makes no representation or warranty as to its accuracy or completeness.
Side Lot Rules
Here are the rules for purchasing a side lot:
- All applicants must own the house next door to the side lot
- Applicants cannot have any overdue taxes
- Side Lots will be sold on a first come, first serve basis
- Preference will be given to the neighbor that has maintained the lot
- Applications will be reviewed within three business days
- You are expected to pay the annual property taxes on this property after its purchase.