You Bought A Property At The Wayne County Tax Auction But It Needs More Work Than Expected…
This happens quite often and it’s a lot more common than you might think. Buying a house at the Wayne County Tax Auction seems like a great deal at first but reality can come to light after you win the bid and finally get to see what you bought. It’s basically hit or miss with the tax auction and many people make the mistake of buying a lemon or even overpaying. Some of these properties are in fairly decent condition and others are completely horrendous! The truth is it’s basically like going down to the Motor City Casino and putting your hard earned money down on a roulette table. Some lucky folks are winners at the tables sometimes but lets be honest there are definitely more losers than winners in every casino on earth. The tax auction really isn’t too much different either. Even if you did your homework and thorough due diligence there is never any guarantee of success. Lets face it, real estate investing can be very risky.
Things Aren’t Quite Like They Used To Be
There are a lot less good deals to be had at the Wayne County Tax Auction than 3 to 5 years ago. More and more bidders are overpaying for houses and getting burned. Reselling these houses in Detroit which were purchased at auction can also be very challenging. A large number of these properties need more work than what they would be worth after repairs. This is a major issue and very hard to get around. Many novice real estate investors don’t do a good job factoring in these repair costs and end up being in a tough financial position because of it.
Are There Challenges Related To Selling A Property Purchased From The Tax Auction?
There are most definitely some challenges which can arise when selling a house that was purchased at the Wayne County Tax Auction. One of the biggest problems is that the auction properties are conveyed via Quitclaim Deed and not a Warranty Deed. This can be challenging for buyers to obtain a title insurance policy for the property. The vast majority of savvy buyers will not buy a property unless they can get a Warranty Deed! So in order for the buyer to get a Warranty Deed they would need to pay out of pocket for a quiet title action in order to get a Warranty Deed. This process can take several months to complete. For more information about a quiet title action in Michigan go here.