Challenges Associated with Buying a Zombie Property

by Tony Carter, Realtor® 01/10/2021

Photo by Curtis Adams from Pexels

Zombie properties are homes that have been visibly abandoned but actual ownership has not. The term became popular in the housing industry during the 2007-08 housing crisis when people being unable to make their mortgage payments reached a catastrophic point.

According to ATTOM Data Solutions, a firm that tracks different types of real estate data, zombie properties made up about 3% of all foreclosures in the U.S. in October 2019. These homes can be a good buy, but there are some challenges you should be aware of before signing on the dotted line.

How Does a Property Become Classified as a Zombie Property?

A zombie property occurs when a homeowner is told they are being foreclosed upon, and they leave their home believing they must immediately vacate. The zombie scenario arises when a bank either abandons or inadvertently never completes the foreclosure process, and the house is left in limbo with no one caring for the property.

Zombie properties can be very lucrative investments because they are often able to be purchased at rock-bottom rates. The problem is there are some risks involved with buying this type of property because they’ve essentially been abandoned for often long periods of time which sets the condition for many unfortunate events to occur.

Homes Have Been Trashed

In many foreclosure situations, a home is already left in poor condition. In many cases, the homeowner couldn’t financially keep up with upkeep, or they’ve purposely destroyed the home before they left. Any of these problems or others are further exasperated in zombie situations because there is a high probability more destruction has been heaped up upon the original neglect or damage.

Squatters May Have Created Uninhabitable Conditions

Once a house is recognized as a zombie property, squatters or vandals often decide the property is fair game. They might simply come inside to be destructive, or they may use it for their own purposes.

  • House might be full of graffiti.
  • Trash is left behind, and some of it may be unsanitary or hazardous (i.e. dirty diapers or needles).
  • Space may have been used for illegal drug activity, including meth labs, which the latter can create serious health risks.
  • Open windows, doors, or busted plumbing may have created moist conditions and dangerous black mold.
  • Additionally, if vandals or squatters leave doors or windows open, animals, including feral cats might have taken up residence.

    Locating The Title Holder

    Once a homeowner has abandoned a property, they can be difficult to locate. Some may have gone off the grid or others have no clue they are still listed on the property deed. The name of the previous occupant who owned the home will need to be removed from the title so this will be a legal detail to address before a purchase can move forward.

    Purchasing a zombie property can be a very lucrative investment, but it’s essential to carefully evaluate the condition of the property before deciding to buy it. You might find the effort and expense involved in bringing it up to be habitable might be more than it’s worth.

    About the Author
    Author

    Tony Carter, Realtor®

    My wife, Cindy and I, moved to Florida 9 years ago from Wisconsin, where we were born and raised. I proudly served in the United States Air Force and was stationed overseas and in The Gulf War. Became a member of The American Legion and a lifetime member of Veterans of Foreign Wars (VFW). After, the Military, I got into the retail business for the last 25 years. During my last position, in the retail. I was second-in-charge of a 125 million dollar a year business. Thatis where I developed my passion for customer service and taking care of the customer. With that passion, I became a full-time licensed Realtor in the state of Florida. I understand that real estate is not just a transaction but an important personal decision, a decision that may need guidance. I am here to answer any questions and guide you and your family through the process. Whether buying for the first time. Purchasing a condo, single-family home, investment property or a time-share on the beach. I am the exclusive Realtor for the Mariner Beach Club in St Pete Beach, Florida and for the Island Gulf Resort in Madeira Beach, Florida. Please feel free to contact me with your real estate needs directly at cell 262-894-8135 or via e-mail at [email protected] or website; www.TonyCarterRealEstate.com. Timeshare on St. Pete Beach, Florida. www.TonyCarterRealtor.com. Video of the Mariner Beach Club, St. Pete Beach, Florida. www.imagemaker360.com/141537. Website to the timeshare at Madeira Beach, Florida. www.IslandGulfResortFlorida.com