Registered to Buying · 4 min read
Service notes
- Land Bank auction bids start at $1,000 and rise in $100 steps; bidding runs from 9 a.m. to 5 p.m. on the sale date.
- Buyers must rehab Auction and Own It Now houses and get them occupied, and sign a reconveyance deed if they fail.
- Estimated closing costs include a $600 closing and title fee, a $30 recording fee, a $25 tax certification fee and title insurance from $322.25.
Detroit’s median owner-occupied home was valued at $83,900 in the 2020 to 2024 Census survey, well under the Michigan median of $231,600. Some of the least expensive homes in the city are sold by the Detroit Land Bank Authority, the DLBA, which sells houses and vacant lots it holds through several programs and reports its progress to City Council every quarter. A Land Bank house can be a path to ownership for a modest price, but it is not a bargain-bin purchase: it comes with a binding promise to fix the house up and live in it or rent it out. Here is how the process works, according to the DLBA’s own guidance.
The ways the Land Bank sells homes
| Program | How it works |
|---|---|
| Auction | Houses listed with a sale date and sold to the highest bidder in an online auction |
| Own It Now | Houses listed for offers 24 hours a day, 7 days a week, sold as-is |
| Rehabbed and Ready | Move-in ready homes, or homes ready for final touches |
| Traditional listings | Properties listed through the regular real estate market |
| Side Lots | Vacant lots next to your home for $100, or within 500 feet for $250 |
Who can buy
The DLBA sells only to buyers who meet its eligibility rules. Among them:
- You must not have lost property, other than a primary residence, to unpaid taxes in Wayne County in the past three years.
- You must have no outstanding blight or code violations with the City of Detroit.
- You must be a Michigan resident, a resident of another state committed to moving to Detroit to occupy the property, or a company licensed to do business in Michigan.
How an auction works
Each Auction house has a sale date. Bidding opens at 9 a.m. and closes at 5 p.m., but any bid placed after 4:55 p.m. extends the window by five minutes. The opening bid is $1,000 and bids rise in $100 increments. When you bid, the DLBA places a $1,000 hold on your credit card; it is released if you lose and charged as a non-refundable deposit if you win. Proxy bidding is available, but your hidden maximum cannot be lowered or deleted once entered.
Want to see inside first? Private showings are booked through the DLBA website and cost $35. The Land Bank warns that touring a house without approval is trespassing.
If you win
- The DLBA emails you within 1 to 3 business days, then calls to confirm your details and run the eligibility check.
- You receive a purchase agreement and must sign and return it within 3 days.
- If your winning bid was more than $10,000, you pay more to bring the deposit up to 10 percent of the price. On a $15,000 bid, the deposit is $1,500.
- A closing specialist schedules closing with one of the DLBA’s title partners, usually within about 30 days of the countersigned agreement.
Own It Now
Own It Now houses can be offered on at any time. If yours is the highest offer, the DLBA follows the same email, call and eligibility steps. Once you are found eligible, you pay a deposit of $1,000 or 10 percent of the final price, then receive the purchase agreement. Own It Now houses are sold as-is.
Closing costs
Beyond the remaining price, the DLBA lists these estimated costs at closing, all subject to change:
| Item | Estimate |
|---|---|
| Closing and title fees | $600 |
| Recording fee | $30 |
| Tax certification fee | $25 |
| Title insurance | From $322.25 |
| Closing postponement | $50 each time |
Buyers using a mortgage should expect their lender’s own closing costs as well. You receive the title and a quit claim deed.
The rehab promise
This is the part that defines a Land Bank purchase. Buyers are required to rehab Auction and Own It Now houses and make sure they are occupied, following the DLBA’s compliance requirements. At closing you sign a reconveyance deed acknowledging that the property can be forfeited if you do not meet them. After closing you enter the DLBA’s compliance process and must show appropriately paced, good-faith progress on the rehab.
Tip: Budget the rehab before you bid. The DLBA itself advises reviewing the compliance requirements and making a budget to be sure you are ready for a rehab project. A $1,000 house that needs a roof, furnace and plumbing is not a $1,000 house.
Before you bid: checks that cost nothing
- Look up the address in DWSD’s lead service line tool and its impervious surface viewer.
- Check whether the block has a history of basement backups; see Detroit Weather for Newcomers: 45 Inches of Snow, Cold Nights and Basement Backups.
- Plan for permits: a rehab usually needs building and trade permits from BSEED; see Fixing Up a Detroit Home: Building Permits, Trade Permits and Certificates of Acceptance.
- Estimate the property tax once the house is rehabbed and file the Principal Residence Exemption if you will live there; see Detroit Property Taxes for New Homeowners: Mills, the Principal Residence Exemption and HOPE.
If you prefer a move-in ready home on the open market, Detroit’s down payment program may help with up to $25,000; see Detroit Down Payment Assistance: Up to $25,000 for Buyers Who Already Live in the City.