MUSKEGON, MI - Homes nearing the end of their useful life often go unwanted and unsold, even at the bargain-basement prices seen at tax sale auctions. Unless someone wants it, what typically ensues is a mounting list of building code violations, condemnation notices and demolition. But in some cases, there is one last chance to grab one or more of those properties, an online auction on a service such as eBay.
Some of those homes can be real bargains. In an eBay property auction last July, a house at 569 Houston in Muskegon sold for $12,500. It had been appraised at $56,600, according to the Muskegon city assessor's office. An extreme example of this was the $1.75 Chicagoan Joanne Smith paid for an abandoned home in Saginaw in a recent eBay auction, plus about $850 in back taxes and cleanup costs.
Muskegon County Treasurer Tony Moulatsiotis considers eBay a useful tool to help unload some tax-reverted property to bring the county added revenue. "We can't just sit on these properties. We need to sell them," Moulatsiotis said. It's also a way to buy time until the Muskegon County Land Bank, formed two years ago, becomes financially self-sufficient, hopefully within the next three years, Moulatsiotis said.
The Land Bank's primary goal is to acquire the most desirable tax-reverted homes and help get them into the hands of owner-occupants, not landlords. Each year, since taking over the sale of tax-seized real estate from the state, the county holds two property auctions. The first, in July, requires a minimum bid equal to the property taxes owed on it. The second auction in September stipulates a minimum bid of $50. Typically, about 25 percent of the properties sold at these auctions go to online bidders.
Buying a house at auction, either in person or online, has gotten considerably easier and far less time-consuming than it was, says Marty Spaulding, general manager of Title Check of Kalamazoo, the firm used by Muskegon and more than 60 other Michigan counties to sell tax-reverted property.
Instead of taking seven or eight years for a home to clear tax liens, the process now takes one or two. And property descriptions have been translated into a language people can understand. That means the home has much less time to sit vacant and deteriorate.
"It's taken a lot of the difficulty out of acquiring this property for the layman," Spaulding said. "EBay has made it a lot easier," said Will Watson, a Muskegon Heights City Council member who sits on Moulatsiotis' Land Bank Committee. With the help of online bidders, Title Check was able to sell all the property that went up for auction this year.
It might seem as though buying houses cheap online would be an inexpensive way for a landlord to increase his holdings. But Moulatsiotis says it's far more likely that the buyer is merely looking to resell as quickly as possible for a small profit. "The use of eBay is not creating any more landlords," said Moulatsiotis, and Spaulding agreed.
Mark Kincaid, Muskegon's deputy director for fire services and inspections, said eBay sales of homes in his city have not posed any particular problem, for the most part. "For us, the only time it becomes a problem is if the house is on the dangerous buildings list and is going through condemnation or demolition proceedings," Kincaid said. He urged anyone who is contemplating a home purchase in the city to contact the inspections department to check on the status of the house before bidding.
And Watson agreed that if the trend toward online sales of tax-seized homes continues, some local regulations may need to be in place to protect both buyers and the local community. Cutting down on rental properties is also a long-standing goal of the city of Muskegon. It initiated a series of actions to "downzone" large chunks of the central city, from multifamily to single-family use. That means a home that had sat vacant for more than two years could not be used for multiple renters.
Source: MLive.com