The Bank Is KILLING My Neighborhood's Value!

The Bank Is KILLING My Neighborhood's Value!

Dear Liz,
A foreclosed home just went up for sale in my neighborhood and the price is LOW!!!   REALLY LOW!!! They're going to destroy our neighborhood property values!!!  What's the deal with that?  What's the bank thinking???
Signed,
Distressed About Distresseds

Dear DAD,
There's a whole host of reasons behind that price!  And while you may not like that price, the bank has only ONE interest and that's it's own self-interest.  A home is an asset or a deduction on some accountant's spreadsheet.  A liability that the bank is responsible for until it's sold to someone else.

So while that home is sitting there unoccupied, it's deteriorating.  We've visited MANY foreclosed homes and rarely are they in tip top condition.  Often the decline started LONG before the bank got involved.  Once the previous owners couldn't keep up with payments, chances are lots of maintenance got put off.  Holes in walls, electrical problems, slow leaks, they're NOT getting fixed.  The owners probably would have preferred to fix things, but with a lack of money in the wallet it wasn't happening.

And if the bank is lucky, the sellers didn't to any intentional damage on the way out.  We've seen speaker wires pulled through the drywall, every door ripped off it's hinges.  Patio doors left open for the rain to come in and ruin the carpets, and worse.....  Not everyone leaves on good terms.

And even if they did leave on good terms before eviction, things can still happen after the home is empty.  Things a resident would notice don't get caught by the bank.  A leaky pipe doesn't get caught in a few minutes, but perhaps a few DAYS and extensive damage!  And the less savory elements of society might just be watching the foreclosure list too, and just waiting to "acquire" copper pipe from the furnace and plumbing system.  And since the home isn't getting aired out, a prime environment for mold and mildew and other problems.

And assuming the home IS actually in decent condition, they STILL need to get that home sold rapidly.  Every month is an increased loss as they pay for utilities and upkeep.  If there's a fire, it's there problem.  A break-in, it's their problem.  And unlike when someone lives in a home, and empty home isn't providing a return on investment, but instead just digging a deeper hole.

So the bank is going to price the home for it's condition, and price it to move, and move it most likely will.  Either a DIY type or a flipper may go after that home in less than optimal condition, and when THEY go to sell it you'll get a "normal" market price for the home.

And if this one home is the only foreclosure in your neighborhood, don't worry about it dropping your home's value or that of your neighbors.  As long as other homes are selling, a true value picture of the community is there.  It's when the predominant sales in your neighborhood are bank owned or short sales that you should be nervous. (We've seen that too).

As you can see, there's a lot of reasons a bank owned home may be priced low.  Bottom line, you WANT them to sell that home quickly and get someone in there who will take care of it.  Fix what's broken, mow the lawn, loan you their power tools, be a neighbor.

Serving Warren County's residential real estate needs,
Liz and Bill aka BLiz

The Liz Spear Team
Elizabeth & William Spear
RE/MAX Elite:  Ask for us by name if you visit the office!
Two locations: Lebanon & Mason, OH
Office direct: 513-248-3660  Liz direct:  513-265-3004
Bill direct: 513-520-5305 Fax: 866-302-8418     

MailTo: Liz@LizSpear.com  Our Website: Warren County Ohio Homes

 

 

 

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