What Really Happens at a Michigan Foreclosure Sale/Auction?

What Really Happens at a Michigan Foreclosure Sale/Auction?

A few months ago I wrote a blog about the Simpson’s house getting foreclosed on. In the episode, the auction took place in their front yard. If you are facing a Michigan foreclosure, and have received a foreclosure notice, I offer you a small bit of good news. I’m not sure how they’re conducted in other states, but here in Michigan, foreclosure auctions (aka Sheriff Sales) are held at the county courthouse, which will definitely save you some neighborly gossip. They usually happen once a week (sometimes every other week) at the same time each week. It’s not a very exciting auction – no one brings out beautiful pieces of art, antiques, or farm animals, and I doubt many Sheriff Departments employ fast talking auctioneers. More often than not, there are no bidders, and the house goes back to the bank that holds your mortgage. There are many reasons for the lack of bidder:

  • The minimum bid (set by the bank) is higher than what investors or individuals are willing to pay. The minimum bid is usually what you owe on the house.
  • The winning bidder must show up with cash within one hour. Many people don’t have that much cash on hand, and need to finance the purchase by obtaining a mortgage.
  • People are unfamiliar with the auction process, and brush it off completely.
  • The purchaser will have to wait out the redemption period (usually 6 months)and will not get the house if the borrower is able to redeem (which is done by paying off the entire balance/the highest bid amount) plus interest.
  • There is a surplus of foreclosed houses – more homes than people want
  • The winner is buying the house as-is, usually sight unseen. It could be damaged, either from the start, or by the time the redemption period runs out.

If you have a financial hardship and your house is headed for auction, we may be able to help you avoid that Michigan foreclosure. And if the house has already been to auction, we still may be able to help you. Either way, time is NOT on your side, so call Emily, and she’d be happy to discuss your options with you.


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