One of the biggest problems facing Detroit, its residents, and its landscape is tax foreclosure, which affects people and properties by the tens of thousands every year. If you've heard of a $500 house in Detroit, that comes from the Wayne County Tax Foreclosure auction.
If you're wondering how in the world this happened, this video is a great place to start.
Tax Foreclosure: After 3 years of not paying property taxes, Wayne County forecloses on a property and tries to sell it at the tax auction.
Tax Auction: Every fall tax foreclosed properties are auctioned in two rounds. During the first round, properties are auctioned with the opening bid starting at the total amount due in back taxes, interest, and fees. The vast majority of properties do not sell and are then auctioned in round two, which has an opening bid of only $500.
Reverter Property: Auction properties are sold with a clause in the contract saying that property taxes must be kept current and that properties must be brought up to code or they will revert back to county ownership. Approximately 80% of properties sold at the auction in recent years are behind in taxes and at risk of reverting back to county ownership, if the county so chooses to exercise the clause.
Withdrawn: Properties are listed as withdrawn if they received a tax foreclosure notice, but made a large enough tax payment, or entered into a program to avoid foreclosure and auction.
Occupied: Occupancy data comes from the Motor City Mapping project.
That can be a complicated question. It's certainly not a good idea to buy something blindly. You could be buying a burned down building, or you could be buying a home with a family living in it. You should visit in person, see what the annual taxes are, and go in with your eyes open. You might find a great thing, or you might find out why someone walked away.