Last Updated on September 17, 2025
Table of contents
- How the Tax Deed Auction System Works in Michigan
- What is a Tax Deed Auction?
- Real Examples of Bargain Properties at Tax Deed Auction
- Why These Tax Deed Auctions Present Opportunities
- Tax Deed Auction Risks and Due Diligence
- Over‑the‑Counter and Surplus Properties
- Pre‑Auction Opportunities
- Frequently Asked Questions (FAQ)
- Conclusion
Every year, county treasurers across Michigan sell properties to recover unpaid real‑estate taxes. These sales are called tax deed auctions. Unpaid taxes can lead to foreclosure, and the county may become the property’s owner. The county must then offer the property at auction to recover the back taxes. This article explains how Michigan’s tax deed auctions work, shows examples of real bargains, and gives tips for beginners who want to participate.
How the Tax Deed Auction System Works in Michigan
Michigan’s tax auctions happen in stages. Understanding each stage helps you plan your bidding strategy.
| Auction stage | How it works | Key points |
| Minimum bid auction | The county sells foreclosed property online. Tax deed auction opens at 10:00 a.m. and closes at 7:00 p.m. Eastern Time. You can increase bids, but cannot retract them once the auction opens. The property goes to the highest bidder at the close of bidding. | Bids start at the minimum bid, which equals the past‑due taxes and costs. Winning bidders also pay current summer taxes, a 10 % buyer’s premium and a $30 deed recording fee. |
| Re‑offer auction | Properties that do not sell for the minimum bid are offered again about a month later. These auctions start with the same minimum bid or sometimes a reduced amount. | This stage gives buyers another chance to purchase properties that were overlooked in the first round. Homes with small defects or poor marketing often resurface here. |
| No‑reserve (sealed‑bid) auction | If a property is still unsold, it moves to a no‑reserve auction. There is no live bidding; you submit a best‑and‑final bid in advance. Bidding closes at 7:00 p.m., and winners are announced later. | Since there is no reserve price, properties can sell for very low amounts. Buyers must still pay current taxes and fees. |
| Surplus or land‑bank sales | Unsold properties remain with the county’s “foreclosing governmental unit.” They may be transferred to a land bank or offered through the county as surplus. | Surplus listings can include tiny strips of land or landlocked parcels. While prices can be as low as $50, they often have little utility, so research carefully. |
What is a Tax Deed Auction?
When taxes go unpaid for a long time, the county (called the Foreclosing Governmental Unit or FGU) forecloses and becomes the sole owner. At this point, the previous owner cannot reclaim the property. Unlike a tax lien (where investors buy the delinquent tax and receive interest while the owner may redeem), a tax deed auction immediately sells the property and transfers ownership to the winning bidder.
Real Examples of Bargain Properties at Tax Deed Auction
The following examples illustrate how big the discounts can be at Michigan auctions.
House on Fifth Street, Owendale (Huron County)
- Minimum bid: The county offered a two‑story home at 3432 Fifth Street, Owendale, for $6,163.52.
- SEV (State Equalized Value): $26,400. SEV is roughly half of the market value but may be outdated.
- Why it matters: In the video, the presenters noted that the property’s market value might be around six figures and estimated rent could be over $1,000 per month. Even without exact figures, the low minimum bid shows how cheap foreclosed properties can be.
House with Garage on Queen Street, Ubly (Huron County)
- Minimum bid: Another property—a two‑story home with a garage at 4605 Queen Street, Ubly—had a minimum bid of $8,473.16.
- Current tax due: $1,359.57. This is added to the price at closing.
- SEV: $38,100. SEV is several years old and may not represent the current condition.
These two properties did not sell in the first auction. They are scheduled for a re‑offer sale and could later appear in a no‑reserve auction. Buyers who do their homework and act quickly might acquire these houses at a fraction of their value.
Why These Tax Deed Auctions Present Opportunities
- Low entry costs: Minimum bids cover only back taxes and fees. Many properties, therefore, open at a few thousand dollars, which attracts new investors.
- Online convenience: Auctions are conducted completely online. You can register, bid and pay by credit or debit card from home. A $1,000 pre‑authorization on your card is required for bidding.
- Possibility to flip or rent: Because bids can be far below market values, winning buyers may resell or rent the property for substantial gains (as mentioned in the video). However, success depends on property condition and local demand.
- Multiple stages: If a property doesn’t sell initially, it may return at lower bids. Re‑offer and no‑reserve auctions create multiple opportunities for bargain hunters.
Tax Deed Auction Risks and Due Diligence
Investing in tax deed auctions is not risk‑free. Follow these steps to protect yourself:
- Research property details: Do not rely solely on the SEV; it may be outdated or inflated. Properties may have burned or deteriorated. Use online maps, pictures and, if possible, drive‑by inspections.
- Understand taxes and fees: In addition to your winning bid, you must pay the current year’s summer tax, a 10 % buyer’s premium and a deed recording fee.
- Check for hidden costs: Michigan properties sold at auction are free of most past liens, but new liens filed after foreclosure may survive. Also, confirm whether demolition orders or unpaid utility bills exist.
- Inspect title issues: Title insurance for tax‑reverted land can be complicated. Some insurers may refuse coverage; consult a title professional if you need insurance.
- Budget for repairs: Many auction properties need significant work. In some cases, the county requires buyers to rehabilitate buildings within a set time (for example, $500 houses in Highland Park). Factor in construction costs and local codes before bidding.
How to Get Started with Tax Deed Auction
- Choose a location:
Use the map or county resources to select counties with upcoming auctions.
- Register and place a deposit:
Create an account on the auction site and authorize a $1,000 hold on your credit card.
- Review listings:
Search for properties within your budget. Pay attention to the minimum bid, current tax, SEV and auction date.
- Inspect properties:
Whenever possible, visit the property or view photos through your account. Evaluate local market rents and sales to estimate potential resale or rental income.
- Bid responsibly:
Determine your maximum bid. During the minimum bid auction, you can increase bids until the closing time, but you cannot withdraw them. In a no‑reserve sale, you must submit a sealed maximum bid in advance.
- Finalize the sale:
If you win, you have five business days to pay by wire transfer, certified check or credit/debit card (with a fee). Submit signed and notarized paperwork promptly to receive your deed.
Over‑the‑Counter and Surplus Properties
After the no‑reserve sale, unsold tax deed auction parcels stay with the FGU and may be offered as surplus. These listings often include tiny or landlocked parcels such as 30 × 80‑foot strips or wetlands. They can be very cheap (sometimes $50 or $100), but they may have no access or building potential. In rare cases, however, a surplus lot may be worth buying if it is adjacent to another property; the neighbouring owner might pay you for it to enlarge their yard, as mentioned in the video. Always verify access rights and local zoning before purchasing surplus land.
Pre‑Auction Opportunities
The presenters also discussed pre‑auction deals. Before the county takes possession, delinquent owners can still redeem their property. Investors sometimes pay the back taxes directly and get the owner to deed them the property (sometimes called a “pre‑foreclosure” or “assignment” deal). While this strategy can lead to huge discounts, it requires careful legal work and cooperation from the owner. Make sure any agreement is recorded properly and that there are no other liens or mortgages.
Frequently Asked Questions (FAQ)
Michigan uses a tax deed system. When taxes go unpaid for a long time, the county forecloses and sells the property itself. In some other states, a tax lien is sold instead, giving the investor a claim against the property while the owner can still redeem it.
Your total cost equals your winning bid plus 10 % buyer’s premium, current summer taxes and a $30 deed recording fee.
State law requires counties to start bidding at the amount of back taxes, interest, penalties and foreclosure costs. Because many delinquent properties have small tax balances, the opening prices are often just a few thousand dollars.
No. The SEV shown on the auction site often comes from the delinquent tax year, which may be several years old and not reflect current conditions. Always do your own market research.
Unsold properties remain with the county. They may be transferred to the local land bank or offered as surplus properties. You will need to contact the land bank or the county directly to purchase them.
Conclusion
Michigan’s tax deed auctions provide an accessible path into real estate investing. Bargains like the Owendale and Ubly houses show that properties can sell for just a few thousand dollars. However, you must research each property’s condition, taxes and potential resale value. Start by exploring counties of interest, register online, and follow the auction calendar. With patience and diligence, tax deed auctions can be a practical way to build wealth through real estate.
