Abandoned homes present a real problem in the neighborhood. Regardless of the reason the home is not being cared for, the immediate neighbors probably face a slight decrease in property value and increased likelihood of vandalism.
We want to distinguish homes that are simply vacant, meaning everyone in the neighborhood knows when and why the last occupants left, from abandoned homes, where people sort of left without saying good-bye.
Sometimes this happens because of foreclosure, when owners often leave suddenly. Other times you're dealing with an elderly, mentally ill, or jailed homeowner or tenant who leaves temporarily, only to have the expected time away stretch into forever.
Sometimes abandoned homes are in some kind of legal limbo. Maybe there is a court proceeding that is preventing their being put on the market, or maybe the owner is incapacitated and there was no forethought about what would happen in such a situation.
(In other words, there is no power of attorney to act for that person, or the conditions under which the power of attorney can be activated haven't kicked in.)
If abandoned homes are tied up in an estate that is in dispute, this can go on for a long time without outsiders being able to do much about it. As a neighborhood, it's certainly appropriate for you to express your displeasure about this situation to heirs, if you can locate them.
In some communities, what is variously called heir property, generational homes, or successional properties may be found. This occurs when estates have not been handled in the legally prescribed way, and therefore after a couple or more generations, the number of heirs who would have to be found and agree to sell becomes unwieldy.
Let's look at foreclosures first. Foreclosure occurs when a lender isn't getting borrowed money repaid. So the first task, learning who now owns the home, is relatively simple.
This is a matter of public record, and the recorder in the county where you are located can help you determine the current owner. Online records may or may not lag behind the actual paper documents by days or weeks.
The hard part will be finding an actual responsible person at the bank, mortgage company, or holding company that now owns the home. Often the recorder is only able to provide you with a post office box rather than a street address. Sometimes the tax address is an attorney or a property manager too. In this case, you might have to take the old-fashioned step of writing a letter.
If the lender who now owns the property is a major national bank, you can try your luck with a toll-free customer service number obtained from a website. Sometimes if you are persistent enough, this will allow you to find an actual person to talk with.
When you locate the property owner and talk to a representative, you can ask for the REO department. REO means "real estate owned." Someone there should be able to give you a formal or informal opinion of how aggressively the bank wants to try to sell the property, whether they have an asking price, how they will accept offers, and so forth.
Encourage them to list the property with a local real estate agent, and even go so far as to suggest good agents who are familiar with your neighborhood. That's far better than having prospective buyers call some 800 number in a faraway city.
Of course financial institutions may not want a broker agreement because they don't want to pay a commission. However, if property in your neighborhood sells briskly, tell the representative this, backing up your statement with any facts and figures you've been able to gather before making the call.
If the market is working satisfactorily, odds are that the home will both sell faster and for more money if they list with a reputable local agent than if they wait for someone brave enough to call a company known for distressed properties.
If you are a neighborhood organization, you will want to insist on good maintenance on the part of the financial institution.
Sometimes the maintenance level will be relatively decent, at least in terms of exterior appearance, if the bank thinks they can re-sell the property for a significant amount of money. The small houses in a low market demand area, however, may be more of a problem.
A problem in the most recent part of the foreclosure crisis is so-called zombie foreclosures, where banks started but never finished the foreclosure process, so those are literally in never-never land of ownership. The bank does not own them, but the property owner has walked away and has no intention at all of either reclaiming or maintaining the property. This is tough for neighborhoods; we have to hope for stronger real estate recovery so that one party or the other will be motivated to assume the rights and responsibilities of ownership.
If by any chance you're part of a city decline where population loss has been huge, go right to our shrinking cities page.
The same effort to locate the property ownership information and then attempt to contact the owner applies in other cases of abandoned homes.
Try first to find a neighbor who understands the situation. If you're unsuccessful and yet you're in a real neighborhood with homes relatively near one another, the owner may be elusive due to one of the reasons stated earlier.
Again interview neighbors and use the Internet and public records to try to find relatives of the owner if you can't find the owner.
If you find out the owner is in jail, ask an attorney what information you need to determine to assess the situation. Some information, such as location of the prisoner, duration of the sentence, and how your particular state, province, or area deals with prisoner-owned property, may be available to you if you do your detective work.
If you can obtain this information, you can make an intelligent decision about whether and how you might be able to contact the inmate and whether he or she might be able to sell or authorize maintenance of the property from prison.
If you have a mentally incapacitated owner, whether from dementia, Alzheimer's, or institutionalization, you may have a tougher situation. Again a little informal legal advice will go a long way.
You still have the problem of locating the person, determining if
anyone else if able to act on behalf of the owner, and if so, what
legal rights the owner may still possess.
If you must deal directly with the owner, communication and its reliability will be an issue. Don't be unnecessarily brave in the case of the mentally ill; if you have a trained therapist around, perhaps he or she can be convinced to get involved in helping with the communication.
If the owner literally has disappeared, which might happen in the case of a loner who owns the house outright but just decides to skip out on bills or the community, again your Internet research might yield some results.
The easy step is to determine if property taxes are being paid, and if not, when the home will be sold for taxes. If taxes are paid and you can't find any leads, some neighborhoods have been known to resort to a private detective.
We're talking as if finding the owners of abandoned homes is easy, and often it isn't. So we underline again, it's worth the work of trying to look for the owner.
And sometimes these situations heal themselves, as the owner comes home from wherever or whatever.
Advice for Purchasing Abandoned Homes
Neighborhood groups with the means to buy abandoned homes would be rare. But assuming your neighborhood can afford it, this would be a great move on behalf of the neighborhood.
You can re-sell the house immediately or when the market is better, and in the meantime, you control the exterior maintenance and make the house look lived-in with curtains, regular lawn mowing, flowers, and so on.
If you are an investor interested in purchasing abandoned homes, the same procedure for discovering ownership applies. However, on top of the usual due diligence of buying a speculative or rental property, you will have to cope with a financial institution that may or may not have a ready ability to show you the property whenever you would like and go into as much detail about its history as would be true in most normal sales.
No matter who you are, there's no need to overpay for abandoned homes. You're taking on quite a bit of risk that isn't present when you have a seller disclosure requirement and a seller who has lived in a home for a number of years.
If there are many abandoned homes on the market in the neighborhood, feel free to make a lowball offer if you're dealing with a financial institution, and see what happens.
Doing so means that the bank probably will move even slower than normal, which will be slower than you think is reasonable. But if you can wait, try the low offer.
If you're dealing with an individual, you'll perhaps have to make an offer on the high side to be successful. We say that because family members of the incarcerated or mentally ill person will want to make up for their time and trouble.
Or if you're asking feuding siblings in an estate to stop feuding, only a high offer may get their attention enough to motivate them to settle.
But try very hard to assess the situation before you make an offer of any kind. Perhaps the family or the owner himself or herself is in a desperate situation and will be happy to be relieved of the burden of worrying about the house.
Perhaps they simply are pessimistic about the neighborhood or too far away or too busy to investigate the sales opportunity. So sometimes there might be a bargain in the wings.
Community Organizing to Solve Upkeep Problems
It's not the vacancy issue per se that is bad for your property values and your neighborhood's reputation. It's the peeling paint, the porch that's falling off, the overgrown vegetation, the rusting car in the driveway, the blind that has fallen partially.
Elsewhere on a more general page about abandonment, we've described how to attempt to use code enforcement to resolve the issue.
This is an important and reasonable step. However, don't expect code enforcement to intimidate a financial institution, and fines may not be significant enough to unlock a sibling battle over what to do about mom's house.
If code enforcement doesn't work in your situation, then you as a neighborhood have to take matters into your own hands. Either you're going to live with it, you're going to persist in detective work till you find a responsible party to take care of the property, or you're going to consider becoming a trespasser.
We say our site doesn't give legal advice, so keep that in mind as we're describing do-it-yourself techniques. It's probably not smart from a legal perspective. But then there could be other perspectives, do you think?
It's important to the entire neighborhood to prevent vandalism by having every property, including any abandoned homes, cared for.
The really sad situation will be when you have several abandoned homes in your neighborhood, and market demand for these homes isn't sufficient to cause them to move quickly. That's when you really must organize yourselves, if you don't already have a community organization.
There are two reasons for the suggestion to organize to face the issue of abandoned homes: