Tax Deed Sales in Michigan: Bidding, Redemption, and Title Risks

Tax deed sales in Michigan are public auctions where county Foreclosing Governmental Units sell properties the government has taken for unpaid taxes, transferring fee simple title to the winning bidder. Auctions run between the third Tuesday in July and the first Tuesday in November, and unlike states that sell tax liens, Michigan sells the actual property.¹ By the time a parcel reaches the auction block, all redemption rights have already expired and the former owner has no path to reclaim it.

When Auctions Happen and What Gets Sold

Each county’s Foreclosing Governmental Unit, usually the county treasurer, runs the auction. Sales take place in person or through online platforms, with Tax-Sale.info serving as the platform for many Michigan counties.

Not every foreclosed parcel reaches public bidding. Michigan law gives government buyers first crack. The state picks first, then cities, villages, townships, and city authorities, then the county, then any county authority covering the area. All of these government purchases wrap up before the first Tuesday in July. Only properties no government wants reach the public auction.¹

Registering to Bid

Registration requirements vary by county but share common elements. Expect to provide a government-issued photo ID and, if bidding for a business, documentation of your authority to act for that entity. You will also sign an affidavit certifying that you do not owe delinquent taxes on other properties within the auction’s jurisdiction. False certifications can disqualify you and expose you to perjury charges.

Deposits vary widely. Wayne County, for example, requires $1,000 to bid on a single property, $10,000 for multiple properties, and $25,000 for premium parcels. Deposits are typically due several days before the auction and generally must come as certified funds, wire transfers, or ACH payments. Your deposit applies to any winning purchase or is refunded if you don’t win.

How the Bidding Works

Every parcel opens at a minimum bid that includes all delinquent taxes, interest, penalties, and fees, plus the costs the Foreclosing Governmental Unit incurred during forfeiture and foreclosure. Those costs can include legal fees, mailings, publication, maintenance, and remediation.¹ For many neglected parcels, that minimum bid lands well below market value, which is what pulls investors into these auctions.

Bid increments vary. In Wayne County, the minimum increment is $100 for properties with a minimum bid under $10,000 and $1,000 for higher-value parcels. Highest bidder at the close of bidding wins.

What a Winning Bid Actually Costs

This is where inexperienced buyers blow their budgets. Many Michigan counties charge a buyer’s premium on top of the winning bid. On the Tax-Sale.info platform, the premium runs 10% of the winning bid.² A $20,000 winning bid actually costs $22,000 before you add this year’s summer taxes and the recording fee.

Your total out-of-pocket on a winning bid includes:

The winning bid itself
Buyer’s premium, commonly 10%
Current-year summer taxes, which the buyer picks up
Deed recording fee, typically around $30

Set your maximum bid with all four pieces in mind before the auction starts, not after you’ve won.²

Paying and Getting Your Deed

Payment windows are tight. Wayne County gives winning bidders 72 hours to pay in full on purchases under $100,000, with properties over that threshold requiring 25% down within 72 hours and the balance within seven days. Other counties set their own deadlines, but plan on days rather than weeks. Payment typically comes by certified check, wire transfer, or ACH, though some counties now accept credit and debit cards with processing fees.

Once payment clears, the Foreclosing Governmental Unit must issue a deed within 14 days, and that deed vests fee simple title in you.¹ State-issued deeds arrive after roughly 30 days from the purchase date.³ Because redemption rights expired months before the auction, the former owner cannot redeem the property after you buy it.

What the Foreclosure Does Not Wipe Out

The foreclosure judgment clears most prior liens and ownership interests, but several categories survive and travel with the property to you.⁴ These include:

Visible or recorded easements and rights-of-way, including utility easements and shared driveways
Private deed restrictions and use covenants
Recorded oil and gas leases, and mineral rights preserved under the Dormant Minerals Act
Future installments of special assessments
Environmental liens recorded by the state under the Natural Resources and Environmental Protection Act

Environmental Liability Is the Sleeper Risk

Government entities that take contaminated property involuntarily through tax delinquency get statutory protection from cleanup liability.⁵ Private buyers at auction do not. Buy a former gas station, dry cleaner, or industrial parcel with contamination, and the remediation bill can land on you. For any commercial or industrial property, environmental due diligence before bidding is not optional.

The IRS 120-Day Redemption Window

Federal tax liens get special treatment that state foreclosure cannot override. If the IRS had a recorded lien against the former owner, the federal government has 120 days from the date of sale to redeem the property, or whatever period state law allows for redemption, whichever is longer.⁶

If the IRS redeems, it pays you back what you spent at auction and then resells to recover both that payment and the original lien. The risk is low on most small residential parcels. On higher-value properties or where the former owner had known federal tax problems, it matters. Check the county register of deeds for federal tax liens before bidding. The sale must give the IRS at least 25 days’ written notice for the lien to be discharged, and if proper notice wasn’t given, the lien may not be cleared at all.⁶

Title Insurance and the Quiet Title Problem

Winning the auction and recording your deed does not make the property immediately sellable or mortgageable. Title insurance companies generally will not issue a policy on tax-foreclosed property until a court has resolved potential competing claims. Without title insurance, conventional buyers and their lenders walk away.

The fix is a quiet title action under MCL 600.2932, which lets anyone claiming an interest in real property ask the circuit court to settle the matter and order competing claimants to release their claims.⁷ Once the court enters its order, title companies will treat the property like any other. These cases typically run six to twelve months, faster if uncontested. Budget attorney fees into your bid analysis. You can delay the action if you plan to hold the property as a rental or for personal use, but the issue surfaces the moment you try to sell or refinance.

Occupied Properties

Some tax-foreclosed properties still have people living in them at the time of auction, whether the former owner, tenants, or unauthorized occupants. The Michigan Department of Treasury advises buyers not to take possession or try to remove occupants until the recorded deed arrives, roughly 30 days after purchase.³

After you have the deed, formal eviction through the district court is the route if occupants will not leave. Self-help eviction is illegal in Michigan. That adds time and legal expense that belongs in your cost analysis before you bid. Drive by the property beforehand whenever you can.

1
Michigan Legislature. Michigan Compiled Laws 211.78m
2
Tax-Sale.info. Frequently Asked Questions – Michigan Public Land Auction
3
Michigan Department of Treasury. Frequently Asked Questions – Tax Foreclosed Real Property Auctions
4
Michigan Legislature. Michigan Compiled Laws 211.78k
5
Michigan Legislature. Michigan Compiled Laws 324.21323a
6
Office of the Law Revision Counsel. 26 USC 7425 – Discharge of Liens
7
Michigan Legislature. Michigan Compiled Laws 600.2932