TRAVERSE CITY -- Homes that sell at government auction for less than half their value: Once a myth, now reality, thanks to the choking state and national recessions.
A Charlevoix house on 10 acres with a lake view that was valued at over $300,000 on Friday sold for $92,000. A $145,000 home in Kingsley will go on the auction block Aug. 3 with a minimum starting bid of $7,550, enough to pay back taxes accumulated over three years.
"There are some bargains out there if you're willing to look," said Tom Willard of Title Check LLC, which runs tax sales for more than 50 Michigan counties.
Forfeitures from 2006 unpaid taxes are up and similar properties forfeited from 2007 will be even greater, Willard said.
Otsego and Antrim counties both have more than 50 lots going to auction this year, while Grand Traverse County jumped from six lots to 14. What's more unusual than the number of properties, county treasurers said, are the number of nice houses on the block.
"I've got four houses this year and it's the first time I've ever had any," said Charlevoix County Treasurer Marilyn Cousineau.
All four houses sold for less than half their market value.
Area treasurers attribute the available houses in relatively good condition to banks that foreclosed on mortgages, but forgot to pay outstanding taxes.
The bank had a buyer lined up for the $300,000 Charlevoix home, Cousineau said.
"The buyer called 10 minutes before the deadline (and was) frantic," she said. "An attorney from the bank showed up two days after the deadline and wanted to pay for it, but it was too late."
Grand Traverse County Treasurer Bill Rokos said if a mortgage exists on the property, the bank typically pays back taxes to protect its interest. For some reason, the Kingsley house slipped through the cracks.
As of March 31, the county owned the property free and clear, based on unpaid property taxes from 2006. The minimum bid also will cover taxes and fees from 2007 and 2008.
"This is one of the better properties we've had and it should generate some more bids and hopefully some more money for the county," Rokos said.
Properties generally sell for around their assessed value, or about half their market value, but every auction and property is different, treasurers said.
"Some people, when they go to an auction, they just like to bid and they don't like to lose," said Benzie County Treasurer Linda Wilson. "Sometimes you'll get a person from California who just wants a piece of Michigan, and they have no clue what they are buying."
Bids can be received both at the auction or live over the Internet. Bidders need $1,000 cash and the ability to cover the entire purchase price within one hour of the auction's close.
To see a listing of properties for pending auctions go to www.tax-sale.info.
