Steps to Buying a Foreclosed Property That the Government Has Taken Over in Michigan

Michigan State government uses a verbal auction process to sell foreclosed properties to the public.

Buying foreclosed property from the state of Michigan is not complicated but does require proper planning and research. Foreclosed property are auctioned off by the Michigan Department of the Treasury two times a year at least 28 days apart between the third Tuesday in July and the first Tuesday in November. Real property for which property taxes have not been paid are subject to foreclosure under Michigan law. Parcels are forfeited to the county treasurers for unpaid taxes in the second year of delinquency. Taxes which remain unpaid as of March 31 in the third year of delinquency are foreclosed upon by the state.

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Cashier checks

Instructions

- 1
  
  Read the state of Michigan's Tax-Foreclosed Real Property Auction Rules and Regulations and section 211.78m of the General Property Tax Act, Act 206 of 1893. Combined these documents describe the legal framework governing the auction process as well as your obligations when bidding on and purchasing property from the state of Michigan. A copy of both these documents can be viewed online at the Michigan Department of Treasury's website.
- 2
  
  Sign up to receive auction event dates with Michigan Department of Treasury by emailing the department at listserv@listserv.michigan.gov. State in the body of your email message "subscribe TAXforCAUC," followed by your first and last name. This will enable you to receive timely notification of the time, date and location of coming auctions.
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  Review the Michigan Department of Treasury's listing of foreclosed properties to be auctioned. Information regarding auctions and lists of parcels can be viewed on the Department of Treasury's Real Property Tax Forfeiture and Foreclosure web page at least 30 days prior to the auction. Write down the minimum bid amount and the local parcel ID number for the property which you intend to bid on at the upcoming auction.
- 4
  
  Prepare a pre-issued cashier check or checks made payable to Michigan. The cashier check must be greater than the minimum bid amount. For instance, if the property you are interested has a minimum bid of $1,000 you might want to prepare a cashier check for $1,100 and have a second check for $2,100 if $2,000 is the maximum amount you are willing to pay for the property in question. Your final sales amount will also include a separate fee that must be paid.
- 5
  
  Register to participate on the same day of the auction by completing form 4204. Arrive early at the auction location to ensure you have enough time to complete form 4204 prior to the time when the property you want to bid on will be auctioned. A copy of form 4204 can be obtained from the State of Michigan's Department of Treasury's website. You will need to provide a valid driver's license or other valid state issued ID.
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  Make your verbal bid when your particular property is being auctioned. Clearly state your bid to the auctioneer conducting the auction.
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  Complete a preliminary purchase application, form 4203, if your bid is accepted as the winning bid. Pay to the state of Michigan the final sales price as recorded on the application. A copy of form 4203, preliminary purchase application, can be obtained by going to the State of Michigan Department of Treasury website.