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Home Owner, Home Owner in San Jose, CA

Why are short sale or foreclosure homes in such bad condition (usually)?

Asked by Home Owner, San Jose, CA Sun Oct 9, 2011

Why are short sale or foreclosure homes in such bad condition (usually)?

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18
Homeowners who are struggling to make their mortgage payments usually don't have extra funds for upkeep and maintenance.
1 vote Thank Flag Link Sun Oct 9, 2011
I am making an offer on a short sale house. the realtor said it could take up to 3 months to go to closing. my concern is the roof is already leaking into the house and has damaged the ceilings. if i have to wait 3 months to go to closing i know the damage will be more severe and i may not want the house any longer. is there anything i can do to about this?
0 votes Thank Flag Link Wed Mar 27, 2013
Perhaps rethink your decision to buy the home or make sure your offer price reflects the potential cost to complete major repairs on the home.
Flag Wed Mar 27, 2013
I think you will find that alot of Foreclosures and Short Sales are in very good condition. Many homeowners take pride in maintaining the property even though they may be in financial difficulty. Don't overlook these properties because they can be excellent purchases!! Ask your agent to preview these properties for you if you want to view only those in good condition! Your agent will be happy to provide this service!!
0 votes Thank Flag Link Wed Jan 4, 2012
Hi Home88

Sellers of short sales or those foreclosing do not have the money to maintain their
home. Also, when Banks seize and foreclose property it is 6-9 months after a home
owner has not been able to pay the mortgage.

Home owners facing a Short Sale or Foreclosure are emotionally detached, as their Credit scores are ruined, and they wonder if they get rent in the future or find a job, if they were to loose one.
Now a days employers check your Credit score as one of the many attributes before
they hire you. Also, it is not common for a home owner facing such hard times to take appliances
and fixtures.

Prudent to do all home inspections:
http://www.trulia.com/blog/perry_mistry/2012/01/know_the_ris…

Best regards
Perry

http://www.ruthandperry.com
0 votes Thank Flag Link Wed Jan 4, 2012
people in such circumstances have little to no cash on hand...home upkeep and maintenance can be expensive.
0 votes Thank Flag Link Mon Dec 12, 2011
Dear Home 88,
Yes they often are with foreclosures, not as much with short-sales because the owner wants to be able to get out of the property and sell it. With both, however, they are sold "as-is" meaning you might have to put some work into the property.
0 votes Thank Flag Link Wed Nov 2, 2011
We are involved in a short sale.
The people lose the house and are upset... a foreclosed home is more likely to have the worst damage because the people no longer own it, while a short sale house I'd think they'd hope to sell it!
The short sale we are involved with has no lightbulbs and a smashed open window, and they took all the kitchen appliances and I highly doubt they were any good anyway compared to how dated the house is.
Hopefully we even get it in the end, I mean, we're their best offer and if we can't work with FHA on this (broken window they smashed and no appliances) then they're out of a buyer and are closer to foreclosure.
0 votes Thank Flag Link Tue Oct 11, 2011
Dear Home88:

I've participated in many transactions where the home has a short sale, foreclosure, and regular status. Bad condition and good / excellent condition can be found in all types of homes. I find it best to treat each home on the market and each transaction independent of all others. This way my clients, and I, go in with an open mind and deteremine the best strategy for each situation.

Showing empathy and understanding of all parties works well when looking at others homes.

Sally Blaze
Realtor, Alain Pinel Realtors
925-998-1284
sblaze@apr.com
0 votes Thank Flag Link Tue Oct 11, 2011
Hi Home and thanks for your question.

To be frank, I've sold both foreclosure and short sale homes to buyers just like you, and they are seldom in "bad shape" today--that was certainly not the case about 2 years ago, but today, both banks and sellers are learning the lesson that abandoning the property has greater consequences than simply a loss of price. For the most part, most sellers know that it is to their advantage to help the home get the highest possible price, so short sale homes are often maintained, but not necessarily completely improved.

Foreclosure properties, as one agent already noted, can be either cleaned up and improved by (often) the listing agent or bank, and while it can be missing appliances, most are in good and serviceable condition with some areas that need repair due to neglect. Depending on the length of non-occupancy of the home, the condition may be better or worse than comparable foreclosure homes in the area. Again, most foreclosures are cleaned up but seldom improved often due to lack of funds by the sellers.

Most importantly, Home88, you can greatly minimize potential problems during and after the sale by working with a qualified and experienced agent familiar with both foreclosure and short sales home purchases.

Good luck!

Sincerely,
Grace Morioka, SRES
Area Pro Realty-PC
0 votes Thank Flag Link Mon Oct 10, 2011
Generally, short sales that are still occupied are not in poor condition because the owner still lives there. Now, foreclosures (that may have been empty for a considerable period of time) can vary in condition. I've seen some that were completely stripped and others that needed only a little bit of work.
0 votes Thank Flag Link Sun Oct 9, 2011
In addition to cabinets and appliances it's not uncommon to see doors, windows, copper pipe, electrical wiring, light fixtures, carpeting, window coverings, counter tops or everything and anything that has any salvage value But that's just the beginning and most often a result of desperation and need as many folks have lost their jobs, mates, etc. and just plain need to eat and buy gas.

Even worse, however, are those that are just mad at the world and bitter so they will go as far as tearing out drywall, breaking windows and, this will really get you, pouring cement down the toilets. We've even seen homes where certain floor tiles be chipped up and roof tiles removed and/or broken.

The good news, if there is any good news to be had here, is that normally only happens with foreclosures. Folks going through the short sale process tent to take much better care of their homes because they are attempting to deal with it in a way that they may become rewarded for taking better care of their homes i.e. cash for keys or the ability to live in the home until the short sale is complete.

The bottom line is that while distressed property investing can be lucrative to a seasoned and experienced professional it can be grueling and frustrating to a newbie or average home buyer who just thinks they can get a good deal because they think the house has lost so much value.

Truth be known it probably has lost a tremendous amount of its value but how much is it going to take to reconstitute the home into a viable investment after you purchase it and what will you have to market it for and how long will it take to recoup your investment?.
0 votes Thank Flag Link Sun Oct 9, 2011
Hi Home88,

I have seen you pretty active in this forum. To be frank, it's still much better shape today than 2-3 years ago if you were in the market to buy. For example, I showed homes (only 4-5 years old) in Elk Grove area 2 years ago and they all in bad shape because previous home owners trash it, destroy it or take things out to resell it. Fast forwarding, those things are not happening anymore.
Any homes or anything will need TLC just like your car, if no one cares or live in there, of course it is going to get worse and that is the reason we need new buyers like you to buy them.

Have a good weekend.
Web Reference: http://www.4reohomes.us
0 votes Thank Flag Link Sun Oct 9, 2011
In addition to the lack of money, some are angry and blame others for the situation they are in so they do not want to maintain the home for someone they believe is "getting a deal" while they are loosing something. By the time it gets to foreclosure some people try to recoup some of their cost and start selling off what they can, cabinets, appliances, and so forth.

There are also those who want to say inside the home for as long as possible so they make it difficult to show, and unpleasant so that someone will not buy it. This further devalues the property. While they want to punish the buyer for getting a deal, they are actually helping them in some weird way.

Just because they are angry, doesn't make this right and it isn't going to change. Buyers need to understand that short sales involve emotions and having a Broker who can help them along the way and one who can work with the other side as well will be an integral part of their success towards closing.
Web Reference: http://terrivellios.com
0 votes Thank Flag Link Sun Oct 9, 2011
A "short sale" is when a homeowner has a legitimate reason for not making payments, Usually not being able to afford the payment, from a loss of job or something significant. With that being said, If you cant afford your payment you usually cant afford to maintain the property either.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@southerncaliforniashortsales.org
http://www.southerncaliforniashortsales.org
California Department of Real Estate Broker License # 01312992
0 votes Thank Flag Link Sun Oct 9, 2011
The other Realtors have given you good answers, what you have to understand is that for whatever reason there hopes and dreams have been shattered. They feel betrayed, they may have lost there job, someone may have died in the family, most times it is a real drag to be paying a mortgage on home you can't possibly recoup the value on, There credit is ruined, so they give up. Why take care of something that is ruining your life? That is my take on it anyway, there ARE other reasons, but I believe that these generally cover it.
Hope that helps,
Allyson
408-705-6578
allyson@homesbyallyson.com
DRE# 01397256
0 votes Thank Flag Link Sun Oct 9, 2011
As a couple of mentioned before me. Most often the sellers have not funds to do repairs as they are needed. They might have lost a job, had an illness, etc. So repairs are not done. Also when the home is underwater sellers might feel they have given enough to the home and putting anything more into it will not get them anything. Some short sellers try to keep up the property because they feel it is their responsibility but as you say usually the short sale are in bad condition.

I have written a number of blogs on the topic of short sales - http://www.patchadwellblog.com.

Pat Chadwell, Broker
Realty World -Residential Specialists
408-927-6565 x 11
Web Reference: http://patchadwell.com
0 votes Thank Flag Link Sun Oct 9, 2011
The short sale and foreclosure process can be a "long hard road" that often leaves owners bitter. This and the time required causes many to lose interest in maintaining the property for what they view as the bank and a lost cause.

Additionally, it can take months or even years for a distressed property to transition from owner occupied to "for sale" as a foreclosure. These homes are often left unattended for long periods becoming targets for individuals will less than good intentions. Considerable damage can occur from the time the owner leaves until it reaches the RE market.

Hope you find this information helpful.

Bill
0 votes Thank Flag Link Sun Oct 9, 2011
Many people are very unhappy and have stopped caring. And many have just run out of money all together. While others are trying to make the bank really pay. There are as many reasons as there are short sales and REO properties available. However, most people are good and decent and keep the homes looking reasonable.

Jim Mauldwin
Inteto Real Estate
407-863-3020
Web Reference: http://Jimmauldwin.com
0 votes Thank Flag Link Sun Oct 9, 2011
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