Is there an abandoned home that needs work near you or one your listings?
“Shadow Inventory” is an ever-growing number of vacant homes that are maintained by the banks. It’s not a couple here and there but a great multitude…and that’s just in the western Carolina region! They do exist as we have worked on thousands of them over the last 5 years. You’ve definitely seen them in your travels. Especially if the grass is 4-6′ tall and full of trash. They’ve even been in the news (WLOS has done a couple stories on them). Some houses just sit for a few months, and there are those we have maintained for years.
So why does the inventory exist? A majority of the homes are stuck in legal limbo. Divorce, death, hard-to-find co-signers, bankruptcy, back taxes, multiple mortgages, tax assessment, trusts, liens, uncured county violations, lawsuits, all lead to delays in getting the house from preservation (bank maintained) to REO (bank owned). The other factor is simply saturation. If the banks released all of their distressed properties, housing market values would plummet. That hurts homeowners, builders, banks and agents.
So why are some homes maintained and others, a mess? We find that neighbors will sometimes chip in and to mow and trim bushes. We’ve talked to neighbors that have removed trash and cleaned up the house next door to keep the neighborhood looking decent. The banks hire us to maintain homes, remove trash and keep the curb appeal looking fresh. Unfortunately, a number of bids are declined or on hold because the work exceeds any foreseeable profit, there are unresolved legal issues, there are multiple mortgages leading to who is responsible, or quite frankly they fall through the cracks.
Do you have a distressed house that needs attention near you or next to one of your listings? Almost all houses that are being maintained will have postings on the front door with contact information. And it’s true… The squeaky wheel will get the grease.
Calling the media just continues to draw negative attention to our industry – we’ve taken enough abuse – and calling the banks is a waste of your time. So what should you do?
The banks hire asset management (AM) companies. AMs post their contact info and report issues to the banks. If the yard needs to be mowed or trash picked up, look for either a small white, orange or blue sticker on the front door or taped postings in the windows. Then call the number and give them the correct address of the problem home. That’s a start. If nothing happens within a week or two, call the city or county and report the violation. Some houses are monitored (drive-by inspections to door knocks) to ensure they are vacant before an AM posts it. If the AM inspector sees a violation, they have a responsibility to report it to the bank. These suggestions are your best chance at getting problems resolved.
The shadow inventory has its pros and cons. Try to be proactive with these distressed properties before they become a nuisance, and keep in mind that we can only do what the AM tells us to with the banks approval. If you see one of our crews out there working (we drive black Silverados), introduce yourself and bring any concerns to their attention. We’ll be glad to help!