How to Buy a Foreclosed Home in Michigan

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A lender can initiate a foreclosure of a home when the buyer fails to keep up with the mortgage payments. State and federal foreclosure sales in Michigan present the opportunity for investors or aspiring home owners to buy homes at cheap prices.

Buying HUD Homes in Michigan

Use foreclosure listings of the Department of Housing and Urban Development (HUD) to find foreclosure sales in Michigan. HUD sells foreclosed homes of owners who default on mortgages secured by the Federal Housing Authority (FHA). Click on the Michigan link and follow the links to search for Michigan homes listed for foreclosure.

Seek financing for a home purchase. Read the listings for each home to see if buyers can get an FHA loan for the property. The FHA backs certain loans made by private lenders. Banks or other lending institutions may give you a home loan if you qualify. Otherwise, prepare to pay for the home in cash if you place the highest bid on a HUD foreclosure.

Find a local real estate broker registered with HUD to bid on foreclosures. If you place the winning bid, the real estate broker places the bid for you and draws up the contract of sale; choose an authorized closing agent and then pay the balance of the bid according to the closing agent's instructions.

Buying Foreclosed Homes Based on Michigan Law

Find Michigan foreclosure sales in local newspapers. Michigan lenders typically use a sheriff sale to foreclose homes. They must advertise the details of foreclosure auctions in a newspaper. Find out the date of the auction in the listings. The sheriff conducts the sales at a local courthouse between the hours of 9 a.m. and 4 p.m. Although these homes are technically pre-foreclosed homes, you can use these auctions to get cheap deals.

Contact the local sheriff's office before the foreclosure auction date for details on local payment policies. Prepare to make any necessary payments on the auction day. Show up at the auction and place the highest bid to buy a home. You will receive a sheriff's deed when you win an auction. This deed is a legal document that proves you won the auction.

Record the deed within 20 days. Visit the register of deeds at the county courthouse to record your sheriff's deed. The borrower generally has six months to come up with the money and redeem the property. You can then obtain full rights to the house if the owner does not redeem during that period.

Use listings of foreclosed homes to find homes bought by the lender at auction. The lender often wins the bid at the foreclosure auction and then lists the home for sale at a higher price. Contact the agent in each home listing to negotiate a purchase of these foreclosed homes.

Tips

  • Ask a real estate agent about the price of similar homes in the neighborhood of the home. Use this information to determine a reasonable price.

Warnings

  • Check for liens on the property before buying a foreclosed home. Lien holders record liens in the county property records. In some cases, you may be liable for the lien if you purchase a home that has a existing lien.