Home Buying in Dearborn>Question Details

Mike, Home Buyer in Detroit, MI

I want to buy an investment property in East Dearborn

Asked by Mike, Detroit, MI Mon Mar 10, 2008

I have been scouring real estate listings for the last few days for cheap houses. I made a list of houses that I liked. But I've realized that I can't really tell if they are any good. Example: One was going for ~30k. Reading the listing it says I have to have an escrow with the city (or something to that effect) for 40k. I asked and was told it was for repairs. I don't have any credit. I was planning to make an all-cash offer. Does that mean I have to put up 70k for the house plus escrow and then do ~40k worth of repair work? That would put me out of my budget by quite a bit.

Also, does ACR mean the same thing (ie forking over a huge wad of cash to the city of Dearborn)? I see it a lot but I can't figure out what it stands for.

Help the community by answering this question:


The escrow for Alibaba's house was $2,500, so that explains it; even if he spent double that amount repairing the house he won't get mad, had the escrow been over $10,000 he would have had lots of troubles.

The escrow for my house was $33,000 and I bought it last year I have spent about $40,000 in repairs and I have done many repairs myself, had I not done them myself I would have spent +$65,000 just in repairs.

Mike, you have mentioned that the escrow for this house is 40k, I advise you not to consider it, however if you do want to buy it, then don't make any offers over 20K, in fact I think the bank will accept a 15K cash offer, because the bank is stuck with all the house bills, besides the +3K yearly tax bill, city of dearborn steals more money by cutting grass frequently and doing other lame services then billing the bank, they are very aggressive especially when the property is bank owned because they know that banks won't review these +2k yearly services bills and will eventually pay them or if they don't the city will steal the house and auction it! it is a win win situation for the city - they are thieves.
0 votes Thank Flag Link Wed Aug 5, 2009
that may be true now, since the scandals and all that. i bought my house 4 years ago for over 100k. They had over 40k in repairs and couldnt explain half the inspection report. the house was move in condition. Bottom line, all i wanted was a fair price on a house and it was the biggest mistake of my life thus far, buying in dearborn. Im sure sir, you are the exception and not the rule.
0 votes Thank Flag Link Wed Aug 5, 2009
It's not that bad, I purchased a foreclosed home in Dearborn and the escrow was $2500. It all depends on the condition of the house from the previous occupants. I had a couple of inspectors from the city check out the house and they seemed fair to me. They just want to make sure the homes stay in good condition. Also, if you're buying a house under 40k expect there to be a high escrow.
0 votes Thank Flag Link Thu Jul 30, 2009
I also don't advise you to buy in city of Dearborn, the price might be tempting but dealing with inspectors is hell, they are unfair and looking for bribes (tips).

If you decide to buy in Dearborn, I just went through this mess and could assist you, to start you need to get a bond, which is 3% the escrow, so you are looking at about $1,400; the company that I got the bond from is:
Zervos Group, Inc.
(248) 355 - 4411
24724 Farmbrook Rd.
Southfield, MI 48034

Be warned if the escrow is 40K, you will spend way more than that repairing the house, unless of course you bribe the inspectors then, the repairs will cost less than 10K.

If you look at the inspection report you will see many things that don't need to be done but are required, for example demolishing the basement, replacing the porch, replacing most of the driveway / garage slabs (somehow it is a trip hazard), lead and mold certificates, replacing the concrete bathroom floors, replacing second floor ceiling with drywall (fire stoppers!) putting lots of insulation, repairing the stairs, electric/plumbing/hvac certificates etc. etc.

My advice is stay away from city of Dearborn. I would love someone to video tape these jerks while taking bribes, that will sure make me and many residents happy.
0 votes Thank Flag Link Mon Jul 20, 2009
if you are buying in dearborn, reconsider!!! they are crooks and liars. its evident by a building and safety department employee being found guilty of accepting bribes. but i knew this long before this conviction took place. If you are looking to get a certificate of occupancy, good luck!
they actually created a new department, closed the old building and safety office upstairs(its now some sort of fire department) and gave all these crooks new jobs with new titles.
do not buy in dearborn!!! especially with rehab or foreclosed houses. they hold you to a different and unfair standard of doing repairs. i have first hand experience with them. they did a blanket inspection and passed it off as real, when i dont believe an inspector stepped foot in the house. they stated in the inspection report certain things needed to be repaired when in fact they didnt. the plumbing was determined to be changed, when in fact the water had been turned off pre-inspection, figure that one out??? i asked the inspector how he concluded the plumbing needed replacing, his reply was i have 20 years experience. when i had the water turned on, the water never leaked.

im telling you people this is not propaganda, only the truth as i have experienced. they will make your life a nightmare it will cost you a fortune to live in a city that is way past its prime.
0 votes Thank Flag Link Mon Jul 20, 2009
Mike, The City of Dearborn performs an inspection of every home prior to sale. Whatever problems the inspectors find MUST be repaired, usually by licensed contractors, before a Certificate of Occupancy will be issued.

You may be able to purchase a 10 percent bond for repairs when you purchase but expect 7-8 pages of things requiring repair and inspection of any porch roofs. The City is estimating repairs will cost 40,000. I suggest going to the City building dept and asking questions. You should also ask and review the required repairs for one of these homes before making an offer.

ACR is Affidavit of Compliance and Responsibility You will be swearing to make repairs and be responsible.

Many cities in Michigan perform similar inspections and require repairs completed either within 6 months of purchase or prior to sale. I suggest getting a Buyers Agent to reprisent your interests and help you in the purchase of a home. Please view the sample real estate forms on the website below.
Web Reference: http://www.mi-living.com
0 votes Thank Flag Link Mon Mar 10, 2008
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