Monday, June 17, 2013

Zombie Foreclosures Plight Of The Living Debt

If you've come across the term zombie foreclosures in recent months, it wasn't referring to voodoo parlors whose priests couldn't pay the mortgage. Not exactly dead, but not exactly alive, they are properties stuck in a kind of zombie-like limbo. They are homes that have been abandoned by their former owners at some point before foreclosure. Now they are sitting there, accumulating ongoing taxes, liens, and gradual deterioration while the bank decides what to do (or not do) about them.
According to RealtyTrac, there are probably 302,000 zombies” nationwide, so the odds are, some are going to be here.

Before writing an offer for zombies or bank owned properties, inspecting is vital. If a home spent time as a zombie before being listed in foreclosure, damage could have resulted from neglect, or even vandalism (nowadays, copper piping is a frequent target). Lack of central heating during cold and wet periods can lead to mold — and zombies seldom pay utility bills.

Some areas are more affected by foreclosures than others, and a concentration of zombie properties creates its own problems. An empty neighborhood is more likely to attract squatters or looters; neither of which helps property values. But in some areas, that’s a temporary situation. Realistically gauging a neighborhood’s impact on long-term value is a key part of the common sense approach that makes for good investing.