Realtors Give Boost to Foreclosure Sales in Partnership with Michigan County

The Oakland County, Mich. treasurer's program matches local buyers with foreclosed houses and businesses  

 

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Problem: Trying to sell foreclosed properties to a wider audience than just investors.

Solution: Partner with local real estate agents to create the “Realtor to the Rescue” program, matching up potential local buyers with foreclosed homes and business properties.

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Like many counties across the country, Oakland County, Mich. has its share of residential and commercial foreclosed properties for sale. Several years ago, the county started a program called “Realtor to the Rescue” to help interested local families and businesses navigate what can be a confusing purchase process.

“I came in right as the foreclosure crisis was hitting at maximum force,” said Oakland County Treasurer Andy Meisner, a former state lawmaker whose term as county treasurer began in 2009. Meisner started the program in hopes of getting more local families involved.

“Auctions are a mixed bag,” he said. “You don’t know who’s going to show up.” He said he preferred to get local residents to purchase the properties and not out-of-town investors who might just “sit on the property and see what happens” to property values.

The first year of the program, Meisner borrowed a county truck and took a lawn mower to properties, mowing the grass and cutting the shrubs.

“I tried to improve the appeal of the properties and then soon after, I had an epiphany,” he said. “‘Hey, why are you reinventing the wheel? There’s a whole profession out there.’ I reached out to the real estate associations.” He got in touch with the state association as well as the North Oakland County Board of Realtors. “I asked to speak to their board. My message was: ‘Ask not what your county can do for you. What can you do for your county?’ I took a little liberty with President Kennedy’s quote.”

The public-private partnership, now in its sixth year, pays commissions to real estate agents, the county recovers delinquent property taxes, interest and fees from the sales, and residents and businesses put down roots in the county.

Participating realtors join an annual training session conducted by the treasurer’s office about the tax foreclosure process as well as the terms, expectations and details of the program. Realtors then help drive foot traffic through select properties, attracting a new category of auction participant and helping bottom lines for both the county and the realtor.

Here’s how it works: The county emails its list of “Realtor to the Rescue” properties with lockbox codes to participating agents. The county hires cleaning crews to pick up any trash and clean the properties before making them available. Realtors register their potential buyers at the treasurer’s office either in person or online before the day of the auction. Potential buyers can’t owe delinquent taxes or have lost property to tax foreclosure in the past three years in the county.

The Oakland County Treasurer’s Office holds a three-day live auction twice annually. Minimum bids are set at the amount owed on the property, including taxes, fees and interest. If a property fails to sell at the first sale, it’s offered up again at the second sale at a lower price.

Not all foreclosed real estate makes it into the program. “We try to find more turn-key properties,” Meisner said. “But they all have warts.”

The properties that involve a real estate agent typically sell for higher amounts, with an average starting bid of $19,000 and an average selling price of $46,000; those that don’t involve an agent usually start with an average bid of $10,000 and sell for an average price of $28,000. Real estate agents who successfully sell a property get commissions ranging from $750 to $1,500 per property. Those commissions are paid by the county from the auction revenue. To date, 181 homes have sold through the program, and 69 commercial properties. Nearly 200 real estate agents are involved.

“We shouldn’t think we have all the answers,” said Meisner, crediting the partnership with the real estate agents. “It really has been a story of success.”