Rules for Bidding on and Purchasing Properties

See Rules for Purchasing Side Lots

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 6/5/14:


View Properties

•    Browse properties online for at least a week before the bidding opens.
•    See the properties in person at the scheduled Open House events.

 


Register

•    See a house you like? Then bid on it. To bid, register in two steps:
1.    Select a bidder name. One word – no spaces may be included. Offensive Bidder names will not be allowed to bid.
2.    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 Wayne County 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. 
•    You are limited to the purchase of one property per month, and you cannot bid again until you have demonstrated a track record of satisfying the conditions of bringing the property up to code and having it occupied within 6 months. Once you have demonstrated capacity to complete rehabilitation on purchased properties and have them occupied within 6 months, you will be allowed to purchase more than one property per month.
•    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, cannot bid again until it has demonstrated a track record of satisfying the conditions of bringing the property up to code and having it occupied within 6 months. Once the purchasing entity has demonstrated capacity to complete rehabilitation on purchased properties and have them occupied within 6 months, it will be allowed to purchase more than one property per month.
•    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.
•    The bidding will open at $1,000.00. All bids must go up in increments of $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.
•    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.
•    No charge will be made to your credit card when you register. However, a $1,000 authorization will be placed on your credit card when you bid. If you do not have a minimum of $1,000 available credit balance you will not be able to bid. 
•    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 your down 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.


 

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.

 


Winning Bidders

•    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 winning bidder’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.
•    Within three business days after winning, you must pay the balance of the down payment, which is 10% of the winning bid, minus the $1,000 that was already paid.  This down payment may be made either by credit card or by certified check.  At the same time, you must submit a signed Letter of Intent to Purchase.
•    If you fail to make the down payment and submit a signed Letter of Intent to Purchase within three business days, the Land Bank will retain the $1,000 as a penalty charge and you will lose your right to purchase the property and will be forbidden to bid in all future auctions.

 


Deadline 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 and are forbidden to bid in all future auctions. 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.

 


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 house yourself, within 30 days after closing you must provide the Land Bank receipts showing you have purchased the materials necessary.
•    Within 6 months after closing, you must provide the Land Bank with a Certificate of Occupancy for the house and demonstrate that the house has an occupant.
•    If the property is in an historic district or has historic designation, you must provide the Land Bank with a Certificate of Occupancy within 9 months after closing. 
•    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.

 


What happens after the Down Payment?

•    You will receive a Closing Checklist listing the items needed to complete the purchase.
•    If there were any property taxes still due from previous years, the Land Bank will resolve them before the closing. The winning bidder will not be responsible for them.
•    At closing, you must pay the winning auction price in full (minus your down payment), all closing costs, and you will receive a Quit Claim Deed and become the legal owner of the property.
•    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 despite the 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,” 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 at the scheduled open house, 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.