Detroit's plan to auction homes for as little as $1,000 each has yielded results as at least three homes were bought for more than $30,000.
The Detroit Land Bank Authority accepted bids for $30,100, $34,100 and $42,100. The homes were purchased between April 5 and April 7.
Under the rules of the bidding, winning bidders must repaid (rehab) the home, after showing that they have the financial ability to do so and the necessary ability to complete the repairs. And the winner bidder must take occupancy within six months. Under the terms of the agreement, the occupant apparently does not have to be the new owner.
Under the home sales process, which has been named "Building Detroit," a large number of homes have been offered for as little as $1,000. Potential buyers can examine homes for sale online. Buyers must be Michigan residents and cannot have a history of "delinquent taxes or code violations."
Each property is open to bidding for only one day -- between 9 a.m. and 5 p.m. First bidders have to provide credit card information.
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The rules for those who win bids:
- Winning bidders will be notified by email immediately after the auction's close.
- The winning Bidder Name will be listed on the auction website after the bid closes.
- Within three business days after winning, you must pay a down payment of 10% of the winning bid by credit card or certified check.
- If you fail to make the down payment within three business days, your credit card will be charged a $500 penalty and you lose your right to purchase the property.
- All sales are final -- there are no refunds.
And for closing:
- If the purchase price is $20,000 or less, you must close on the property and pay the full amount of the purchase price no later than 60 days after winning the bid.
- If the purchase price is more than $20,000, you must close on the property and pay the full amount of the purchase price no later than 90 days after winning the bid.
- If you fail to close by the deadline, you forfeit your down payment and the property. The Land Bank may offer the property to the next highest bidder, auction it again at a later date or remove it from the auction.
The process is an attempt to sell homes in blighted areas of Detroit that have lost most of their residents, and to repopulate them. At this point, only 12 homes are listed for sale at the Building Detroit website. However, there are thousands of unoccupied and dilapidated homes in Detroit, which means the effort can barely make a dent in the real problem.
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