Help! Foreclosures are Blighting Our Neighborhoods!

Many homeowners who are fortunate enough to stay in their homes are rightfully concerned with their neighborhood because of all the distressed properties around them! Unfortunately, it’s going to be a while before we’re able to ride out the storm of abandoned homes.

Foreclosures are a lengthy process. In average markets, they take about 5 months, but now that we’ve got over 5 times more foreclosures than average, they can easily take a year or longer. In fact, Florida leads the nation in foreclosures, and the Greater Tampa area has more than its share. Unfortunately, this is going to be part of our reality for a while.

Another kink is that since there is such a high volume of foreclosures, the banks are sticking to their prices. Very few homes are being sold at courthouse these days for several reasons; chief among them: 1) foreclosure sale prices are too close to average sale prices, 2) many homes have other liens that prospective buyers would have to clear. So what happens to many of these properties these days is that banks then hand them off to property management companies for rentals. This is also a lengthy process involving financial analysis, bid for repairs, completion of repairs and the rental process. To give you an idea of how long this often takes, my husband works on these properties as a contractor. We’re seeing properties sit unoccupied for sometimes as long as a year and a half! Things are turning around, but it’s a slow process and made much slower by foreclosures.

This is an excellent argument for short sales. Though short sales can take a long time, they are often occupied for a good part of that time. These days, if priced well and handled diligently, the whole process should take 6-9 months from the time of listing, which is a far cry from 18 months. I’ve worked very successfully on short sales for 2 ½ years now and though they are taxing, the benefits are evident. Making the decision to short sale is not an easy one if you can manage your payments. That needs to be deliberated very carefully. For some people, it’s better to take the loss now in order to have the opportunity to turn yourself around financially. For others, hanging in is not comfortable, but it’s manageable and they love their home. However, if you or someone you know cannot make payments, then a short sale is the best alternative. It is better for your credit than a foreclosure and it’s also much better for your neighbors and your community.

Suggestions for homes in your neighborhood that are already abandoned would be: park your car in the driveway so that it doesn’t appear abandoned and speak to your home owners association about having the front lawn cut. These two small steps can help discourage vandalism and keep up the exterior appearance until a management company steps in for the lender. One last thing that I remind myself in the midst of the negative, is to be thankful for the home I’m in. Those of us who still own may be discouraged that we have lowered property values, but we should never forget that we are blessed.