I’ve been warning folks about not jumping in too soon back in MI. I think the price is right now. Bring your money and don’t come without a gun on your hip. I borrowed this article from the front page of detnews.com
Foreclosure fallout: Houses go for a $1
Ron French / The Detroit News
DETROIT — One dollar can get you a large soda at McDonald’s, a used VHS movie at 7-Eleven or a house in Detroit.
The fact that a home on the city’s east side was listed for $1 recently shows how depressed the real estate market has become in one of America’s poorest big cities.
And it still took 19 days to find a buyer.
The sale price of the home may be an anomaly, but illustrates both the depths of the foreclosure crisis in Detroit and the rapid scuttling of vacant homes in some of the city’s impoverished neighborhoods.
The home, at 8111 Traverse Street, a few blocks from Detroit City Airport, was the nicest house on the block when it sold for $65,000 in November 2006, said neighbor Carl Upshaw. But the home was foreclosed last summer, and it wasn’t long until “the vultures closed in,” Upshaw said. “The siding was the first to go. Then they took the fence. Then they broke in and took everything else.”
The company hired to manage the home and sell it, the Bearing Group, boarded up the home only to find the boards stolen and used to board up another abandoned home nearby.
Scrappers tore out the copper plumbing, the furnace and the light fixtures, taking everything of value, including the kitchen sink.
“It about doesn’t make sense to put the family out,” Upshaw said. “Once people are gone, you’re gonna lose the house in this neighborhood.”
Tuesday, the home was wide open. Doors leading into the kitchen and the basement were missing, and the front windows had been smashed. Weeds grew chest-high, and charred remains marked a spot where the garage recently burned.
Put on the market in January for $1,100, the house had no lookers other than the squatters who sometimes stayed there at night. Facing $4,000 in back taxes and a large unpaid water bill, the bank that owned the property lowered the price to $1.
$1 sale to cost bank $10,000
While it’s not unusual for $1 to be exchanged when property is transferred for legal reasons, listing a home in the Multiple Listing Service for $1 was surprising and unsettling to Kent Colpaert, the listing real estate agent for the property.
“I’ve never seen a home listed for $1,” Colpaert said.
“But it’s been hit hard: It’s just a shell.”
On Tuesday, Realtor.com listed one other single-family home, one duplex and one empty lot at $1 in Detroit.
Dollar property sales are the financial hangover from the foreclosure crisis, said Anthony Viola of Realty Corp. of America in Cleveland.
Lenders that made loans to unqualified buyers during the height of the subprime market now find themselves the owners of whole neighborhoods of vacant, deteriorating homes.
“No one has much sympathy for these banks that made subprime loans,” Viola said. “And in some cities like Cleveland, judges aren’t letting them sit on the properties — they’re ordering them to tear them down or sell them.”
So desperate was the bank owner of 8111 Traverse Street to unload the property that it agreed to pay $2,500 in sales commission and another $1,000 bonus for closing the $1 sale; the bank also will pay $500 of the buyer’s closing costs. Throw in back taxes and a water bill, and unloading the house will cost the bank about $10,000.
“It doesn’t make sense in some neighborhoods to keep paying costs and costs,” Colpaert said. “It can make more financial sense to give it away.”
Buyer calls it an investment
Colpaert declined to provide the name of the prospective purchaser, because the deal had not been through closing. The agent did say that the buyer agreed to pay the full list price of $1, and planned to pay cash.
The buyer, a local woman, considers the home to be an investment property and will not live there, Colpaert said, though exactly how soon the buyer can expect to recoup her four-quarter investment is questionable. Replacing the guts of the house will costs tens of thousands of dollars, and the owner will have trouble keeping scrappers from stealing the improvements as quickly as they’re installed. Home demolition costs about $5,000, Colpaert said.
Meanwhile, the new owner will owe $3,900 in property taxes in 2009 on her dollar purchase unless she challenges the tax assessment.
While selling a home for the amount of change most people could find between their couch cushions is unusual, some abandoned homes in Detroit sell for $100; vacant lots can be purchased for $300.
“My 14-year-old son could buy a block of Detroit property,” said Ann Laciura, senior servicing specialist for the Bearing Group.
Bob’s next test date: 12/10/07
Quote of the day: “…can’t be done, it will take too long, not enough pipeline capacity, yada yada but yet they don’t apply the same skepticism to their own “solutions” such as wind and biofuels”
Edited 8/13/2008 6:39 am by Jim_Allen
Replies
I think this was the funniest line in there "The company hired to manage the home and sell it, the Bearing Group, boarded up the home only to find the boards stolen and used to board up another abandoned home nearby."
Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
the line that startles me is,3900.00 property tax in what i assume is a pretty bad hood,on a 65,000. house. sorry i wouldn't give the dollar!
if you spend a year getting this thing rebuilt,diy material cost of 20k,taxes and utilitys another 5k,plus the stress of putting up new doors on it,only to see them gone next day. i got a feeling i could go elswhere there with 30k in my pocket and buy better?
larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I laughed when I saw that tax bill too. I remember many years ago when anyone could buy lots from Detroit for $50. I wasn't interested then and I'm still not interested. It's really a shame. The city has made such a mess out of their political and taxation system that very few people would choose to stay there unless they have too. It is a city of almost 1 million people and there are NO major food stores there. The last grocer pulled out a couple years ago. Frank has had to do a bunch of foreclosure servicing inside the city limits and he has to carry a weapon. He said he was standing five feet from his truck and a guy reached in the window and snatched his laptop. Frank chased him for three blocks before he lost him. I wonder if Frank is lifting the plywood? LOL?He said he went to one house with a work order from the bank to install a water heater. He called the bank and asked them if they understood what kind of situation the house was in. They didn't. Frank said that it was stripped and if he installed the water heater as requested, there would be a fist fight outside before he left amongst the people that would want the water heater for themselves. It wouldn't have lasted 30 minutes in that neighborhood LOL! Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
Why is it theres mo major food stores?????
Probably tired of getting robbed and shoplifted deeply into the RED.The best reward for a job well done is the opportunity to do another.
There's no major anything. If you want to shop and you live in the city you're gonna have to go to the suburbs. Detroit proper has some (but not too many) shops but the neighborhoods are pretty much liquor stores and gas stations.
Detroit is really embarassing. I've been to Buffalo and while the houses looked to be about the same vintage, they were nice. Alot of the Detroit hoods are just wrecks.
I went to look at a job once on the east side. The HO said his house was next to a burned out house.
In a two block drive I passed 6 burned out houses and when I found his, I chose not to even get out of the truck. Even if I would have gotten out he wanted to out 10k into a house worth about 5k. I think it had been a rental for him and he wanted to sell it. I told him not to out a dime in, just let it go.
Family.....They're always there when they need you.
Edited 8/13/2008 2:24 pm ET by MSA1
Isn't property tax based on purchase price?
From what I've seen it's the assessment, not the purchase price.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Nope. They dont "chase sales". If the owner has half a brain, she will have it reassessed to reflect current condition but after she fixes it up it'll be right back up where is now. Actually maybe higher. Michigan has a "Homestead" rule that caps the taxes. The taxes will go up every year but not near as much as on a non-owner occupied residence.
If the previous owner lived in that house for 10 or 20 years the taxes could go up by as much as double.
The other nice thing is that even if the property is assessed today the new value wont go into effect till the next year so she could still be stuck paying 3900 in taxes on a shell in a crappy neighborhood.
Family.....They're always there when they need you.
Edited 8/13/2008 3:33 pm ET by MSA1
Too bad. This has been going on for years and years in Detroit. (Too bad because there are some real architectural gems in the city, some of which couldn't be duplicated for under 200 psf). The city's problems are almost overwhelming from crime, next to nothing employement and an infrastructure in dire need of replacing. Believe it or not, the City of Detroit had the most permits issued for residential construction the past few years, so new building are being built.
Yes, Detroit led in permits when they overtook Macomb Twsp and Novi a few years ago. The condos and lofts were leading the charge in the downtown district. Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
There is some building going on but its a shame that all the old architecture is falling apart.
I think Detroit is trying to build a political reputation to rival Chicago. Nothing gets done downtown.
The mayors latest brainstorm: were short on money for payroll so why not sell our half of the Tunnel to Windsor. Great idea that will get us out of the hole this year but what about when next year is worse cause you sold a revenue producing asset?
What an idiot!
Family.....They're always there when they need you.
He should sell the Detroit Zoo. I'll buy that for a buck. Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
Everyone just voted in a ten year millage to "save the Zoo".
For a home worth 200k it should cost about 10 / year.
Family.....They're always there when they need you.
And Detroit still owns it?!!!! Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
As far as I know they do.
Family.....They're always there when they need you.
The city is almost out of property to hock. Both huge parcels in Northville Twp gone, the old Detroit campground in Brighton gone, I'm sure there are others. Selling "our" half of the Det/Wins tunnel is desperation. Kinda like the State selling off property from the State Parks.
Glad i'm not the only one that sees a problem here.
The worst thing the city could do is dump revenue producing assets.
Family.....They're always there when they need you.
In MI, the exchange of property opens up the taxable value and the taxes should be based on the new selling price. In most cases, that rule was created to raise the taxes. Now it should be used to lower them but you know how slow that process will take. I wouldn't doubt that the taxable value will remain at 65k till someone fights it all the way to the state. Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
You might be able to apply to adjust your taxable value. Worked here in CA.
If, you were in Detroit, and you could find the office that would allow you to "adjust" your taxable value, and the office was open, and there was someone at the desk, and they knew what "taxable value" was, and they actually returned after they talked to you, and they actually had the right form.....you might be able to apply for a reduction.Of course, as soon as you walk out, they shred your request. Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
They can't get any major grocery chain stores to locate inside the city limits. Taxation is high. The bureaucrats do a lousy job whenever you need anything: inspections, etc. Profits are low in the food industry and it's too hard to get good help that won't steal your blind. You can't keep shopping carts without locking them in. It's a mess no matter how you look at it. I did one job and had to pull a city permit back in the early 80's. I refused to work in Detroit after that. Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
Some people that venture into Detroit to rehab hire someone to "live" in the house during construction.
I hear so many stories of new furnace going in on a Tuesday and its gone on Wednesday.
I wouldnt invest a dime in Detroit. If you're lucky enough to find a house in a decent area (which do still exist), from what i've been told hang on for the ride the building dept will give you.
Family.....They're always there when they need you.
Two things stood out to me.
First in that neighborhood the house was still over priced.
Second, I thought taxes in Ferndale were high. Those taxes are criminal.
Oops, given Detroits current mayor does that last statement count as a Flame?
Family.....They're always there when they need you.
It is criminal to charge someone 3900 taxes on worthless property but you will still have to serve your 2 weeks in the slammer. Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
I see that it is so bad that even the dead are moving out of Detroit. DETROIT, Aug. 12 (UPI) -- Even the dead are moving out of Detroit as families that have fled to the suburbs move the bodies of relatives to new cemeteries.City Health Department records show that from 2002-07 about 1,000 bodies were exhumed in the city for reburial elsewhere, The Detroit News reported. The newspaper said that is about one corpse for every 30 people who have moved out of the city.http://tinyurl.com/56mjc6
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
I saw that article the other day too LOL! Detroit is a racially polarized city. The polarization of course started back in the days before the civil rights movements. Whites controlled the city. At some point, all that changed. One of the defining moments in Detroit racial history was the landmark school bussing ruling. That doomed Detroit because of white flight. Pontiac also took a huge hit. Detroit has never recovered and to date it is still a racially polarized city. Bob's next test date: 12/10/07
Quote of the day: "...can't be done, it will take too long, not enough pipeline capacity, yada yada but yet they don't apply the same skepticism to their own "solutions" such as wind and biofuels"
Shoot Jim, even the mayor is looking for a new address!!<G>
He's not looking, he's getting pushed.
Family.....They're always there when they need you.
That was front page news. I dont quite understand. My grandparents are buried in Detroit and maybe my family is different from others, but its not like were visiting every weekend.
I dont get it. Hard to believe in these times people have so much money to throw around moving dead relatives.
Family.....They're always there when they need you.
I believe that some of them are moving to Chicago so that they can vote..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.