City hires real estate experts to sell tax-foreclosed properties
September 25, 2012
HARPER WOODS — Both residents and city officials want to see something done with vacant and foreclosed homes to get them back in the hands of homeowners who will keep the city looking nice.
A recent proposal to buy up some tax foreclosures and work with outside real estate experts to repair and sell the homes has some city officials excited.
“They’re going to do a good job in getting these properties rehabilitated,” acting City Manager Randolph Skotarczyk said.
The City Council voted unanimously Sept. 17 to work with a group led by real estate professionals and licensed builders Thomas Styf, owner of Re/Max Compete, and Martin Siersma on a list of properties.
The group would purchase the properties from the city at the bid price, rehabilitate the residential properties and get them in the hands of property owners, or if that is not possible, lease them to tenants.
Skotarczyk said this type of agreement is common practice in many other cities.
“This is an excellent opportunity for the city,” Mayor Ken Poynter said.
Cities are not offered the purchase of delinquent properties until the taxes become three years delinquent. First, the state can acquire the properties before cities can decide whether they want to pursue them. The cities then can pay the minimum bid, which constitutes the amount of the back taxes, Skotarczyk said.
“Public Act 206 of 1893 states that any payment above the minimum bid must be turned over to the county,” Skotarczyk stated in a memo to the mayor and City Council. “With this provision, there is no incentive for the city of Harper Woods to have companies bid for these properties.
“From the proceeds of the sale, the first benefit to the city is any back taxes owed to the city for the last three years will be returned to the city by the county after payment has been made,” he stated.
While some cities then rehabilitate and sell the homes themselves, Harper Woods is not in a position to be able to do that, but they want to see something positive happen with the properties.
“We really don’t have the staff to do that,” Skotarczyk said.
The agreement with the outside entity will get those properties repaired and occupied. There are 29 homes on this list of tax foreclosures at a total minimum bid of slightly less than $400,000.
“They’re going to immediately get these up to code,” Skotarczyk said.
The next step is making a sale to someone who will occupy the property.
“The end result of that is good for the community,” Skotarczyk said.
“If these were all to go to auction, we don’t know who the buyers are,” he said, adding that this allows them the ability to monitor the process.
“This is our first time in this venture,” Skotarczyk said.
The city has abandoned homes that it would like to see occupied and maintained.
“This is a beautiful community, and we have a lot of beautiful homes,” Skotarczyk said.
For those homes on the list that are occupied with rental owners, the outside team said they communicate with the tenants who sometimes decide to purchase the home themselves.
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