From Engineering on January 22, 2009 in General
This last year, I watched as a friend tried desperately to sell his long-dreamed-for home. Unable to, he reduced the price several times and finally moved into another house for rent, leaving his home empty. Of course, there were many factors involved besides the slump in the market that made things difficult a job change, gas prices, and mortgage payment increase all contributed to his dilemma. Thankfully, he did not have to completely abandon his house, but he is letting it go in a short sale. Not only is he releasing the home he always wanted, he is doing so with a negative equity in spite of the many improvements that should have raised its value.
Its a very sad situation to watch happen to someone you know, and it is becoming almost commonplace. Why would a home be abandoned, what happens to them when they are, and is there anything that can be done to prevent it?
Homeowners are choosing to simply move out of their homes for many reasons. Maybe the main breadwinner has had a job change or been laid off, or perhaps their company is going out of business. Maybe there is a divorce or a death in the family or some other life-changing event. When you add those things along with the economic situation and the bottom dropping out of the market itself, something has to give.
I watched a video report with Lisa Ling for SoCal Connected and realized a little more of the seriousness and unhappy state of things for thousands of homeowners who leave their homes abandoned. She spent the day with a company that does what are called trash outs, completely cleaning out all goods and any left-behind valuables from an abandoned home to get it ready for sale by the bank. It was a very depressing scene to watch, especially given how widespread an occurrence it is. Watch this report at http://kcet.org/socal/2008/09/socal-connected-episode-1.html and realize that this growing crisis is affecting not only the homeowner, but the neighborhood, the city, county, and state each time a home goes abandoned.
An abandoned house brings down the value of all adjoining properties within a mile or so of the house, and when you start counting how many are either in foreclosure or short sale already, its staggering. When a house sits empty, it is targeted for vandalism. Half-empty pools turning green lead to health issues, and without regular up-keep, the property quickly becomes deteriorated, sometimes even ending in demolition.
A sale for less than the value of the mortgage is called a short sale, leaving the homeowner short of the funds needed to settle the debt owed. Banks are reluctantly agreeing to let some short sales go through, but not writing off the unpaid amount, instead, requiring the homeowner to sign a promissory note for the balance due.
A short sale preserves the homeowners credit where a foreclosure will not. Homeowners dont always realize there are options they can use to save their home from foreclosure. For more helpful information, go to http://www.hud.gov/foreclosure/.
Because abandoned homes affect everyone, is there anything you can do to safeguard your neighborhood from vandalism and decreasing value? Here are some recommendations:
- Be part of a neighborhood watch group, alerting neighbors to suspicious activity around homes that are not occupied.
- Notify your local law enforcement so they can do regular drive-bys.
- Call the listing agent and make the suggestion to have lights or sensors on inside and outside the abandoned home. If there isnt any alarm system, a door-jam alarm placed on interior doors will sound loudly if opened.
- Alert the homeowners association of the empty house for routine check-ups and property up-keep of grass and plants.
Abandoned homes are everyones problem, so it might be wise to take it upon yourself to do something if you can. There are no guarantees of 100% protection against value loss as the housing crisis continues to spiral, but protecting against vandals protects the whole neighborhood and the up-keep will keep the house from becoming an eye sore. And if there is the possibility of your mortgage becoming a foreclosure, seek all the help and advice you can from your bank or state for possible funding and bailouts.