Buyer to Pay $1 for House in Detroit

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It's crazy to think that house is not worth more than a dollar. However, the big picture is there are too many bank owned properties in Detroit, banks will give them away, tax assessed values are not keeping up with the real market (thanks prop A), it's not worth remodeling homes in a declining market, and vacant homes are raided for any valuable items. Even by the old model of flipping by buying below wholesale and selling at wholesale value, Detroit is still quite risky. It will only get worse with more OEM job losses or without correcting these problems. You must know what the foreclosure price is, what the bare-bones remodel costs are, and what rents go for in your area. That house dumped by the bank for $10k loss was most likely not worth the $4k plus remodel that the new owner got. Thankfully, the lesson only cost a dollar or so.

Matt of MI 6:12PM March 04, 2009

"FMV is what the buyer paid."
As you undoubtedly know, FMV is completely different than county/city appraised value.

Mark of CO 11:36AM August 25, 2008

One dollar is too much for a house worth less than nothing now and piling up liabilities by the day. After all, the bank knows this and is paying a Realtor #3500 to dump it ASAP. You'd think a compassionate bank would skip the Realtor and run a $500 ad in the paper offering the house for $1 and the other $2,999 cash bonus to the buyer. They would have sold it in twenty minutes.
As for taxes going forward, it shouldn't be too hard to prove that the fair market value for assessment is one dollar. Send the contract and deed to the county. FMV is what the buyer paid.

of 11:19AM August 14, 2008