Houses For $1: "My 14-Year-Old Son Could Buy a Block of Detroit Property"
Things are looking pretty bleak in parts of Detroit these days. In fact, you can get a house for $1. Yes, that's right. A house.
Even at the low, low price of a double cheeseburger at McDonald's, it took 19 days to find a buyer for a gutted house on Detroit's east side, says the Detroit News. The house in question used to be the nicest house around. After foreclosure, however, vandals stripped the property of everything valuable from the wiring to the kitchen sink.
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."
...
"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."
Empty houses are becoming more and more of a problem in Detroit and other cities hard hit by the foreclosure crisis. Banks are so desperate to rid themselves of these properties that they're willing to pay $10,000 to sell a house for $1.
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."
While a $1 house is certainly unusual, even for Detroit, houses can be had for as little as a few hundred dollars these days.
"My 14-year-old son could buy a block of Detroit property," said Ann Laciura, senior servicing specialist for the Bearing Group.
Foreclosure Fallout: Houses Go For $1 [Detroit News]
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Hey, anyone wanna go in on a city with me?
How does nobody "notice", or even care to call the police, as people steal siding the siding and fence off a house?...
@SadSam: They base your property taxes on the assessed value, which (in my area) is 80% of your appraised value. So it's not like you're really paying taxes on $1. But since you don't have the closing costs related to a mortgage that $500 from the bank would probably cover you for the first year. The only value left is probably in the actual land.
I wonder how much it would cost to make that house livable again? More than it's worth I bet.
@EE:
ah ha ha ha ha!! call the cops to the ghetto and think they will show up lol dude you are cracking me up
Hmm, I thought "selling" houses for $1 was fairly common when transferring official ownership between, say, members of a family... I mean, this does sound like a different case, but I don't think the practice is "certainly unusual".
I've read there are a bunch of churches doing farming (to generate produce for soup kitchens) on empty abandoned lots in Detroit where the houses have been knocked down, and the city encourages it, even though the churches don't own the lots, since it's at least pretty and productive.
@BlondeGrlz: well, tearing it down and building fresh wouldn't be all that expensive, given that (a) the land cost a buck, and (b) so many people in construction are hurting for work.
@BlondeGrlz: I wonder how much it would cost to make that house livable again? More than it's worth I bet.
I'd wager the same, unless Batman came along and cleaned up the neighborhood first.
I wonder if the neighborhood surrounding the house is worth even living in? It does say that the house is a couple of blocks from the airport, so it may not be anyplace you would want to live if you have a choice. I would be willing to be that it's not an individual that purchased the house, but rather a development company. Anyone remember on The Wire how a holding company was buying up all the blighted houses? The same thing is happening in North St Louis. I would imagine that it's happening in Detroit as well.
@EE: If you take a look at the house on Google street view, you'll see it's next to and across from a pretty large empty lot (well, empty except for the pile of garbage and tires). If you stroll through the neighborhood, you'll see other empty lots, along with an inordinate number of tires lying around. Something tells me this isn't the most policed area in Detroit.
I've actually looked into buying several properties in the Detroit area and converting them to small farms. Turns out that there are several issues with this: The obvious one is zoning laws. Secondly, oil tank removal and soil remediation can run you up to $20,000. Alternatively, if one were to attempt to rehab a $1 home, chances are said home has fallen victim to arson or major theft and vandalism like the one above. I'm estimating that it would cost $50k-$70k to rehab a home like the example in the article.
So, wouldn't it have been cheaper for the bank to figure out a way to let the foreclosed family stay in the house? Is this a case of foreclosure out of spite?
I think the more pressing question is, if evict people on a house you are planning to sell for $1 and pay all fees, taxes, etc., why not just forget the loan?
This isn't a mortgage meltdown problem. This is the neighborhood of savages problem.
They took the siding and the fence but left the satellite dish?!?!
You have to pay for service for the dish to be of any value.
Remember that Simpsons episode when Bart bought an office building for $1?
I had no idea the show was in Detroit.
There's something seriously wrong with a $2,500 commission on a house that sold for $1.
@SadSam: if you rtfa, it says next year's tax bill will be $3900 (unless the buyer challenges it).
if it were me, i'd demo the house (i certainly think it can be done for less than $5000) & then offer the property to adjacent property owners. probably the quickest way to make a few bucks off the transaction.
@SadSam: You could, you know, actually read the article and find out!
Can anyone remember when Detroit wasn't a cesspool? It has to have been at least 25 years.
It's pretty much the same situation in Buffalo, NY. I've heard that we have around 20,000 vacant homes. Nobody knows what to do with them, and nobody wants to buy them, so they just sit there and are vandalized even more.
incidentally, this is the best part of the article (imho):
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.
rofl.
@woodenturkey: srsly, this is the neighborhood made famous by people like Michael Moore and Eminem, and not famous in a good way, either. It gets that way because (1) nobody has any money anymore, and (2) nobody gives a damn. The whole place has been on life support so long people are beyond numb to this sort of thing.
"Oh, a bunch of guys just pulled up across the street in a truck to get the copper pipes and wiring."
"That's nice, dear. More coffee?"
Location location location.
So why even bother foreclosing on the house and kicking the deliquent owners out. Wouldn't the bank be better off continuing to try to work something out or hounding the owner? Even if they continued not to pay, the bank would *still* be better off without a worthless leech of a house on their hands.
You couldn't give me that dump.
Because then the neighbor could have the crack house with the biggest yard on the block
The owners probably abandoned the house
TO be fair, Detroit property has been declining since long before the mortgage crisis. Detroit property value has been in trouble since the car factories closed. This is just icing.
$1 houses! Just another sign that the governments housing bill aint' going to work. I recently wrote a detailed article (too long for the comment, you can check it out here - [www.savingtoinvest.com]) where a number of readers vented their anger at why we have to bailout broke home home owners who have foreclosed!
Detroit is a sad, sad city. I'd love to move there, but go one or two blocks off of the main, populated areas and you could be in the line of fire. Many times I've headed downtown for a concert and got lost, within a few days, I'll notice the street I was lost on was the site of a shooting or attack. As far as not calling the cops, there just aren't enough. Detroit Public Schools has had to shut down so many schools and just lock them up because they can't even afford to move anything of value elsewhere (like entire computer labs), which leads to more theft. The average response time on the alarms on these closed buildings is two hours, because again, there is just not enough staff to respond. In the end, the fact that the mayor has been charged with a felony (regardless of his guilt- I'm not here to debate that) and is spending a lot of time and money on fighting the charges isn't helping. There isn't a true leader in Detroit right now and there aren't enough programs to force these thieves into work or education (or else lose their benefits) so they can keep scraping by.
There was another article (or editorial) in the freep that talked about how the fire department in Detroit has to pick and choose which fires to attend to and when (and who knows who's choosing what). The idea of abandoned homes in Detroit being a new problem is a joke. Since I was a little kid there has been a problem with vacant houses. The arson of these vacant houses has been in the news for at least the last five years on a very regular basis. Hell, last Christmas someone hogtied a litter of puppies in a house and lit it on fire (one of the puppies, Miracle, was saved and is still recuperating). I love Detroit, but I can't move there because I don't know the areas well enough and one wrong turn could be my last. It's so sad to visit, too, because you can see the beautiful buildings everywhere that are crumbling. Plus, when a coworker of mine looked at a house in a "nicer" neighborhood in the city, the Realtor explained why the house was on the market. The previous owner has just got home and heard a noise, so he thought it was another neighbor who had seen him pull in his driveway. It was a burglar and he was shot and killed. The Realtor's explanation? Well, he didn't come downstairs to answer the door with his gun. He would've scared them off and be fine if he hadn't forgot his gun. Having to be armed to answer my door just isn't a viable option for me.
$1. Seems about right for Detroit.
I'd be worried that there are lots of unpaid taxes and whatnot associated with that land. There is a reason it's a firesale, and it's probably not because the owners are bored with it!!
@backbroken & @ WiglyWorm : That was my first thought as well. At the very least let the family stay there while the bank's trying to sell and give the family a chance to buy back the house if it's going to go as low as a dollar.
@corthepirate: 20K? Good googly moogley!
The obvious hasn't been stated yet:
Where is Omni Consumer Products when we need them?
Halliburton perhaps?
Buy the block, build some walls around all your new properties, and you have your own little compound!
Careful. Some of these $1 houses are nothing but liabilities. Perhaps the city has sent the owner a notice that they need to remedy some code violations, or a notice that the city intends to bulldoze the house and then charge you for the service.
There are tons of great reasons why you don't want a $1 home.
I don't think there's any way this property is doable. Suppose the knockdown/etc. was free. You'd have a lot of land that you'd be paying $2k/yr on for taxes.
You'd do better if that $2k/yr was earning 0% interest in a checking account.
@: exactly. or, if the entire neighborhood is going under, properties could be bundled & sold to a developer.
this is how one guy in my hometown got filthy rich - he bought virtually the entire downtown that became dilapidated when the mall moved in - now that a "walkable downtown" is all the rage, guess who owns the property that the new movie theatre, 6 blocks of boutique stores, 2 office buildings, a half dozen restaurants/bars & 2 apartment complexes sit on?
Yeah to almost everybody, and it's a damn shame because Detroit is home to some of the best people in the world. I love that city, moved there as soon as I could when I was young, and then tried to move back with my family -- but no. You can't in good conscience live there with kids anymore, if you can avoid it (and I'm quite grateful that I could, that I had a place to change my mind and go to instead).
The dollar houses have been around for quite a while, and they're yet another band-aid, not a deal. I kind of wish the band-aids would quit making headlines, because they overshadow the FACT that until somebody does something about the rampant official corruption (the mayor ain't the half of it) and positively disgusting amounts of systemic, sanctioned economic and racial discrimination that that poor town is subject to, none of this will ever get fixed.
Some day, somebody will come along who's forced to admit that and deal with those two overarching causes. Until then? Detroit will remain cool mostly for being like Gotham. *sigh*
@backbroken: in Detroit, much like many other cities right now, a pile of scrap metal is worth much more to a thief than a satellite dish.
A friend of mine was looking at buying a house in a much nicer neighborhood (Woodbridge) than this one, and in between the time he was there and the time that he decided against it, all the plumbing was stripped. And this is completely normal in Detroit.
Once a year the city holds tax auctions where you can buy properties all over town for less than $100. A girl I used to work with bought a plot over by Wayne State for $75 and turned it into a small park using donations for the cleanup and playground equipment.
And yes, there are several churches using vacant lots for urban gardens. The city doesn't exactly approve of it, but they also don't give them a hassle, either. The biggest one I've seen is over at the MLK/Grand River/Trumbull intersection, but I think that church actually owns the lot.
Condemn the house, demo it, recycle/resell the materials from it, destroy the foundation. Then plow, till, plant and harvest. Produce rates being the way they are you'll make a pretty penny this time next year.
It's DETROIT. Who in their right mind wants to live in a city that is the symbol for the failure of the american manufacturing economy?
@CRSpartan01: That would show up when the title search was run and the liabilities would be paid off when the sale closed.
I'd like to blame the victim here: if the banks hadn't made all sorts of bad loans, they wouldn't have all sorts of houses to take $10000 loses on selling them for a buck.
As a matter of fact some friends of mine got hosed on buying 5 "investment houses" in Detroit. They could not keep the vandals out OR find someone to rent 4 of them...or even keep the non-paying renter in the best one. They couldn't pay the high Detroit taxes and forget about buyers!
They got a GREAT bankruptcy deal because the banks and city are so overloaded with foreclosures that they will agree to ANY terms just to file them through. It was the only alternative, and it is getting more favorable by the day. It is sad, but it almost encourages bankruptcy--they would have never gotten such a deal in a sane city with banks who were not overloaded.
On the flip side, the homeless population of Detroit is doing pretty well with these houses. They have free housing and (because the utilities are overloaded and the properties are poorly managed by the overloaded banks), they have free heat and water too. My friends have thousands of dollars in utility bills on their "vacant" houses (the ones that they no longer own) that they forward to the bank on a monthly basis. The bank just ignores it all due to being overloaded.
Wow! I wonder what the real estate taxes will be on that $1 house?