Can You Sell a Condemned House?
Broken or boarded-up windows. Overgrown yard. Roof gutters falling off. Peeling paint. Front door hanging off its hinges, giving a peek of the dark void within.
That's usually the image evoked when one thinks of condemned homes. Creepy, right?
But, did you know that houses in perfect condition can be condemned as well? Yes, you read that right.
Look around your neighborhood, you have probably seen condemned homes with a sign installed out front warning people to stay away. Heck, you might even own one!
If so, you might be wondering if it's possible to sell a condemned house.
Read on to learn about what happens when a house is condemned, and what you need to know when trying to sell condemned property.
The Condemnation Process
Condemnation, in the context of real estate, is a legal process wherein the government entity assumes ownership of private property.
The government has the power to do this for a myriad of reasons:
- If the property poses a serious risk to the health of a community
- If the property is abandoned or dilapidated, attracting criminal elements to the area
- If the property will be appropriated for public use, such as urban renewal efforts to combat blight and improve the overall wellbeing of the community
When the government deems condemned buildings a threat to public health and safety, the occupants will be ordered to move out of the property. Local authorities can order its demolition if the owner hasn't fixed the condemned building after a certain period of time.
What Is a Condemned Property?
A property receives a condemned status when the government deems it unsafe for people to live in, or when it acquires the property for public use through the exercise of eminent domain.
How Do You Remove a Condemned Status?
A condemned property may be un-condemned if you do the necessary repairs and rehabilitation works to make it inhabitable again. Afterward, the local building department will conduct an inspection to ensure that all the works are code-compliant and the formerly condemned house is indeed safe to live in. Only then can the condemnation be reversed.
Ultimately, how you remove a condemned status depends on why the local authorities got the house condemned in the first place.
What Are the Grounds for a Property to Be Considered Condemned?
Generally, a single event isn't enough to cause a property to be condemned. It is usually a multitude of problems that have popped up and allowed to fester over the years.
Some of these problems could stem from:
Significant Structural Damage From Natural Disasters and Accidents
The roof may be torn off (hurricanes); basement walls may crack and bow (floods); columns and beams may crack and floor may sag (earthquakes); or, part or the whole house may burn down (fire due to improper electrical wiring).
These natural disasters and man-made accidents can cause structural damage on a property, and when not dealt with, can severely compromise the safety of its occupants.
Code and Safety Violations Arising From Unpermitted Work
You might think you'd be able to save money by not pulling the proper permits.
While this can be true in the short term, this kind of ill-advised decision can have expensive and disastrous consequences later on. Without permits, there is no professional oversight, and you open yourself up to shoddy workmanship possibly filled with code violations. Building codes are there for a reason, so if your property violates it, it can be deemed unsafe to live in. Thus, you'll have a condemned home.
Even if the house isn't officially condemned, you can still have trouble selling this property, as most buyers usually ask for the permit history regarding the additions and upgrades to the house. Furthermore, as part of the buying process, the mortgage lender financing the buyer usually orders an inspection to ensure that the house is in good condition. If the inspection finds code violations, the property owner will be required to correct them (with permits this time), or the deal would fall through.
Unsanitary Living Conditions
Hoarder homes, packed floor to ceiling with accumulated personal items and debris present dangerous living conditions. Clutter attracts all sorts of infestations such as black mold, termites, and rodents. Neighbors may report it to get the house condemned.
It can then be cited for various health and safety violations, leading to being tagged as condemned property.
Additionally, if the plumbing system isn't working, this would lead to unhygienic conditions for the inhabitants and thus, the property can be deemed unfit to live in.
Through an Act of the Local Government
Local governments have the power to seize private property in support of projects for public use such as road expansion.
It is done through the use of eminent domain, with the property owners compensated according to the fair market value of their property. Valuation can be a contentious issue between both parties, so oftentimes property appraisers are usually involved as expert witnesses in the proceedings.
It must be noted that you will still be responsible for the mortgage payments, property taxes, and other liens levied on your condemned property until the case reaches settlement.
What Can You Do With Condemned Properties?
Option #1: Rectify the Issues to Remove the Condemned Status and Bring It Up to Code
A condemned property usually has a whole host of issues that led to it being tagged as such. Since a house is a system, when a problem is left unaddressed, it can lead to a multitude of others. This typically happens when a house is abandoned for a long time so no one is around to keep an eye on the property.
For instance, a leaky roof can lead to moisture accumulating inside the home, bringing about an environment conducive for the growth of black mold.
Additionally, this water entering through the roof could compromise the structural integrity of the underlying rafters and beams.
Prolonged water exposure could cause ceilings and floorings to collapse.
Also, because the house is abandoned, the utilities are cut off. Rodents and other pests could end up burrowing into pipes or chewing through conduits, leading to expensive re-piping or rewiring. Sooner or later, you end up with a condemned house unfit for human habitation.
Let's see how much you could end up spending making repairs, just because a leak in the roof hadn't been fixed early on and the situation spiraled out of control.
In order to find out the extent of work that needs to be done on your condemned home, you need to arrange a home inspection.
Inspection cost: $400
Mold remediation cost: $2,300
Roof replacement: $10,000
Ceiling repairs: $900
Structural flooring repairs: $10,000
Electrical rewiring: $10,000
After the works are completed, it should pass inspection, so that means arranging another one before the house condemnation can be cleared by the local government agency.
Needless to say, you must have deep pockets when going with this option, as it can set you back a minimum of tens of thousands of dollars. This can still go up depending on the assessment of the home inspector, and other possible safety concerns that may be uncovered while the repair and retrofitting works are ongoing.
It is not unheard-of for required repair works to exceed the value of a condemned house, and if you think that's more trouble than it's worth, then it might be better if you...
Option #2: Demolish the Condemned House and Sell as Vacant Land
In this case, instead of investing a substantial amount of your money and time to bring your property up to code, you can choose to just bulldoze it and sell it as vacant lot. Sometimes an empty lot is more marketable than trying to sell a condemned house.
The cost of having a house demolished depends on the following:
Total floor area: the bigger the property, the more expensive it is to demolish;
Type of material: the type of material the house is built with;
Age of the house: if the house was built prior to the year 2000, there is a chance that asbestos is present in the property. This presents a health hazard and must be removed and disposed of only by specialists, which can add around $2,000 to the total demolition cost.
On average, you should be prepared to shell out around $10,000 for the demolition of your condemned house.
That's still a lot of money involved, and if you don't have the budget for it, then you can just...
Option #3: Sell the Condemned House As Is
You must be asking yourself: "Can you sell a condemned house as is?"
Well, if your property is in a great location and can be had for a great price, someone is sure to bite. The challenge herein is finding this special type of buyer motivated or crazy enough to purchase such a property.
Fortunately, there exists a class of buyers--real estate investors and house flippers--who purposefully seek out these types of real estate properties. These buyers know exactly what they're signing up for: a fixer-upper which can entail a significant upfront investment of time and money to transform it back into a house fit for human habitation.
As a bonus, real estate investors pay cash and can close on a sale quickly. So if you're in a rush, selling your condemned home as is to a cash buyer is your best bet.
A thing of note: all the necessary repairs for the condemned building will be factored in their fair cash offer, so you'll be selling for a lot less than the current market value of the property. However, with all the expense, hassles, and stress that you were spared from, this is certainly a win.
How Do You Sell a Condemned House?
The selling process for condemned houses is similar to a traditional home sale. You have two choices here: invest cash now to sell for more cash later; or sell for cash now.
Sell for Top Dollar With Real Estate Agents
Generally, if you're looking to sell a condemned house for top dollar, you must list with a real estate agent.
They wouldn't be able to sell your condemned home as is though, so it would take a substantial investment on your part to bring it up to code. You'll have to arrange inspections, vet and hire contractors, and call for an inspection again to make sure that everything is aboveboard. You can skip this if you choose to work with realtors who also offer concierge services, as they'll deal with the work necessary to make your house livable again. Afterwards, they'll stage the home, conduct open houses, evaluate offers, negotiate, and close the sale on your behalf.
For all this work, real estate agents are compensated through commissions, usually up to 6% of the sale price which can eat up a significant chunk of your profits.
Furthermore, selling this way takes time--on average, 60-75 days, on top of the time you already spent with the repairs. If you have time constraints, going this route won't be feasible.
Sell Fast to Cash Buyers
What's great about selling to cash buyers is you don't have to do anything to your condemned building. No inspections, repairs, or cleanups--which means you don't have to spend a dime in preparation for the sale.
Selling a condemned house to a cash buyer such as a real estate investor is the quickest way to sell it. As they pay cash, they're not at the mercy of mortgage lenders. Granted, their cash offer may be a bit lower, but since they don't have to wait for loan approval, they can close quickly--sometimes in as little as 7 days!
Closing Thoughts: Selling Condemned Houses
The selling process can be exhausting, even more so if dealing with a problem property such as a condemned home. It can come with a lot of expenses you may not be prepared for. The sooner you could get it off your hands, the sooner you'd be able to move on with your life.
Here at House Buyer Network, we aim to spare you from all these headaches and hassles. We buy all types of real estate: duplex, townhouses, condos, you name it--in absolutely any condition! Yes, we even buy condemned houses!
Looking to sell your house fast?
Check out our fair cash offer by filling in the form below with your property address, phone number, and email. We'll get in touch within 24 hours, and if you like our offer, we can close on the date you choose. We even cover all closing costs!
For any questions you might have, just dial (855) 835-2544 and we'd be happy to talk with you!