The Reality of the Michigan Tax Foreclosure Timeline

In Michigan, property taxes become delinquent on March 1st of the year after they were billed. At this point, a 4% administration fee is added, and interest begins accruing at 1% per month. If those taxes remain unpaid for another year, the property is “forfeited” to the County Treasurer.

It is important to understand that forfeiture is not foreclosure. Forfeiture is the final warning phase where interest jumps to 1.5% per month (18% annually) retroactive to the date of delinquency. If the taxes are not paid by March 31st of the following year, the property is officially foreclosed, and you lose all rights to the home. Once that March 31st deadline passes, there is no “redemption period” like there is in a mortgage foreclosure. The title transfers to the government, and your equity could vanish.

Option 1: The Traditional Sale (The Racing Clock)

You can list your home with a real estate agent, but this is a risky gamble when a tax foreclosure date is looming. A traditional sale in Michigan can take 60 to 90 days to close. You must factor in time for staging, inspections, and the buyer’s mortgage approval.

If your foreclosure date is less than three months away, a traditional buyer might not move fast enough. Additionally, many retail buyers are scared off by the “clouded title” created by a tax lien. You would need to ensure that the sale price is high enough to cover the delinquent taxes, interest, penalties, and the 6% agent commission at the closing table.

Option 2: Personal Loans or Refinancing

If you have significant equity, you might consider a home equity line of credit (HELOC) or a personal loan to pay off the lien. However, most traditional lenders will not approve a loan for a property that is already in the forfeiture or foreclosure stage. Their risk departments see the tax lien as a “priority lien,” meaning the government gets paid before the bank if things go south. If your credit score has taken a hit due to the unpaid taxes, this option becomes even more difficult to secure in time to stop the March 31st deadline.

Option 3: A Direct Cash Sale (The Safety Net)

For many Michigan homeowners, the most reliable way to save their equity is a direct sale to a cash buyer like Speedy Sale Home Buyers. A cash sale bypasses the need for bank appraisals and inspections, which are the most common reasons sales fall through.

We can close in as little as 7 to 10 days. At the closing, the title company will use a portion of our cash offer to pay off the County Treasurer in full, immediately stopping the foreclosure. Any remaining money goes directly to you. This allows you to settle your debt, protect your credit from a foreclosure entry, and walk away with a fresh start and cash in hand.