Is It Possible For Vacant Houses To Hurt An Entire Block?

Selling your home is complicated enough, but did you know that the value of distressed properties in your neighborhood can lower the value of your own home? It is a sad fact for many homeowners who have well maintained homes that when a neighborhood experiences multiple foreclosures or vacant properties, their own home may suffer some of the consequences. Here are a few ways that vacant foreclosures can hurt your property value and what you can do to address this challenge.

How do Foreclosures hurt a neighborhood?

When a family has a distressed property that is going into foreclosure, it may hurt more than just their personal living situation. Depending upon the status of the neighborhood and the lending institution, the foreclosure can hurt a whole neighborhood.

If someone down the street is selling their house and they get an appraiser to give them a current fair market value of their house the appraiser may have no choice but to use the cost of the foreclosed homes in the comparable homes. If you only have a few foreclosures they will be thrown out when the appraiser does the comps and you will still get a good appraised value for your home. However if you have a lot of foreclosures and short sales in the area the appraiser might not have a choice, and may be forced, to use the price of those homes in their appraisal when they are figuring out the fair real estate market value of the home. When this happens, even if the person selling has made all of their payments on time and has excellent credit it will still cause them to have a lower value, and the value may even be less then what your neighbor paid for it in the first place.

Also foreclosures and short sales are known to attract criminal activity to the neighborhood. Homes that are abandoned and unkempt will be prime places for hoodlums to hang out and to further vandalize the home. These homes will also attract more and more people that you don't want in your neighborhood and will actually cause the neighborhood to go downhill. If you have a home that has broken windows and a lawn that hasn't been taken care of is not only an eyesore for the people that live in the area but it will also be something that will deter many prospective buyers when they are looking at your home.

What You Can Do

The first thing that you should do is find out who actually owns the property. Get a hold of a real estate agent and find out if the property is bank owned. Before the lender has actually acquired the property there is not a lot that can be done about things. Once you find out that the lending institution owns the property you will want to get a hold of someone in the foreclosure department and let them know that the house is not being taken care of. If possible talk to your neighbors and ask them to also call the bank, this works especially well if you can find neighbors that bank with that lending institution because they will have more of a vested interest in taking care of their own customers.

If you hear nothing from the bank, call up the city's code enforcement division. Every town has a building and coding department, and the city, just like you, has an interested in upkeep of properties within its limits. Often a lending institution will take action after a city order has been made in order to prevent liens from being made, making the property even more difficult to sell.

In the meantime, you and your neighbors can take turns keeping in an eye out for suspicious activity and making the home seem less abandoned. This can be done by parking a car in front of the home, cutting the lawn yourself, or participating in the neighborhood watch program.