Derelict properties are in nearly every neighborhood. They have a shabby-looking facade and have no signs of life. Broken fences, overgrown weeds, bushy lawns, busted windows, and disintegrated walls.
A derelict property refers to an abandoned or unoccupied building “vacant housing” that is in a dire state of repair because no one has permanently inhabited it for at least 6 months.
Common characteristics of derelict properties include:
- The gardens are bushy and unkempt
- The compound is cluttered with rubbish
- The property is infested with pests and rodents
- No one goes into or exits the building (if there are no squatters)
- The windows and doors are boarded up or covered with metal screens
- Squatters conduct illegal activities on the property, such as peddling drugs
- The building has broken doors, busted windows, and holes in the roof/walls.
The derelict property guide – study aims to raise the awareness and the importance of the growing problem of abandoned homes without residents across the globe, educating and presenting a perspective on possibilities how to sell, buy and find abandoned homes.
- In-depth research – United Kingdom
- Brief information – Canada (Vancouver), USA (New York City); Australia (Sydney/ Melbourne); New Zealand (Auckland), Hong Kong
Reviving abandoned real estate is one way of reducing the “waste of empty homes”.
Why Do People Abandon Derelict Properties?
Many derelict properties remain abandoned for longer periods due to a number of valid reasons. It starts with homeowners abandoning the properties once there is a need for costly repairs and they realize that it is unsafe and costly to live there.
Renovating the property may not be cost-effective when you need to carry out several repairs, such as concrete replacement, plumbing, electrical wiring, foundation repair, landscaping, painting, roofing, and many others.
Once the occupants leave, not only will the empty homes be accessible to criminal activities, but they also pose a risk to the lives of squatters. For instance, in 2006, 25% of derelict houses in England were wholly or partially destroyed by fire, as reported by the London Fire Brigade.
This adversely affected the value of adjacent properties. 2017-2018 saw an increase of long-term empty homes by 5.3%, that’s additional 11,000 long-term empty homes just for one year. On average, one in every 60 homes is abandoned or sat long-term empty.
Other related reasons people abandon derelict properties include foreclosures, bankruptcies, unforeseen deaths, and hostile divorce processes.
Who is Responsible for Managing Derelict Properties?
It is the duty of the owners of derelict buildings to secure the property and make it safe. Privately owned derelict buildings that are openly accessible and dangerous to the public are usually handled by local authorities who direct the owner to make the building safe.
In case of any complaints or injuries resulting from events in derelict properties, such as fire, explosions, storms, unstable chimneys, broken glasses, weak walls and fences, loose roof tiles, among others, local authorities are mandated to force the homeowners to pay for any arising costs.
Therefore, derelict property owners should make practical efforts of securing the buildings before abandoning them by fencing them and putting up clear ‘no trespassing’ signs. This increases the chances of trespassers being compensated if they suffer any injuries while on the site.
This article provides buyers, sellers, or even agents with tips and tricks of using digital services as virtual staging, virtual refurbishment, etc., to sell and buy derelict property at better prices.
Introduction to the Market and its Problems
While on the brink of a housing crisis, the UK has 840,000 properties that are considered derelict, abandoned, empty or vacant, with England leading with about 290,000 houses. Furthermore, a large number of these houses are exactly the highly demanded types: family houses instead of city centre apartments.
Crumbling bricks and mortar could be the visual legacy of Covid-19, claims project leaderthecourier.co.uk
Crumbling bricks, broken windows, and overgrown gardens of empty homes could be a visual legacy of the economic crisis caused by the Covid pandemic if action is not taken to bring more properties back into use.thecourier.co.uk
In the US, one in every 63 residential properties in the cities are being abandoned, which means that approximately 1.6% of all residential properties in the US are derelict/empty. With an ever-increasing immigrant population, the government needs to build at least 4.6 million residential properties and renovate about 11.7 million empty homes by 2030 to address the looming housing shortage.
The White House reports that as of 2019, over half a million Americans don’t have a home to sleep in on any given night, while almost 17 million potential homes were standing empty. If the overall numbers of homeless citizens weren’t shocking enough, between 2017 and 2019, there was an increase of over 34,000 unsheltered homeless people nationally – even before a global pandemic and expected recession.www.self.inc/info/empty-homes
The UK government fell short of its target of building one million new homes by 2020 or 250,000 homes per year, while the US failed to build over 325,000 new homes per year to meet projected demand by 2030.
It is still advisable to renovate empty properties to make up for this acute shortfall. The good news is that it takes about six months for two-thirds of abandoned houses to be occupied after being temporarily vacant.
When is a house not a home?
Many homes are not bought as a primary residence but rather as a store of wealth, a medium to deliver capital appreciation, and a source of rental income – a combination of the three. Capital appreciation is a prominent attraction in markets that saw property prices triple between 1996 and 2006 – 2007.
Despite some fluctuation since the financial crisis, there has been further significant price growth in most major countries. Some wealth investment is domestic in origin, some international. That calls into question the definition of such property as household and the degree to which local planning targets for annual newbuild contribution to housing stock, homes for permanent residents to live in, and are realistic or accurate.
What is the Government doing about Derelict Houses? *UK
Derelict properties are considered detrimental to the market value of adjacent properties, which could drop by up to 12%. This means that homeowners and realtors could lose a lot of money after selling a home situated next to a run-down property.
According to a study carried out by Hometrack in 2003, homeowners with property located near an abandoned house sold for less than 18% its value compared to if it was an occupied house.
In 2008, the UK Government began implementing some key measures aimed at renovating empty houses and putting them back into the real estate market for residential use. By giving derelict property owners an Empty Property Grant of up to £20,000, along with a discounted refurbishment VAT rate of 5%, the government subsidized the cost of renovating empty properties across the UK.
The government encouraged local authorities to reduce the 50% council tax discount for derelict properties. In addition, once a property has been renovated to match the Decent Homes Standard, it is usually listed under the Housing and Planning Delivery Grant system, which enables property owners to access financial incentives for meeting building targets.
However, the abovementioned measures have not been effective enough to address issues surrounding derelict property with land for sale, as they are largely located in uninviting vicinities. According to the Halifax report, 80% of local authorities that have the highest number of derelict properties are among known to be the most run-down areas in England.
Generally, the most difficult task is finding the right buyer who is willing to reside in the derelict property after renovation.
Things to Consider before Investing in Derelict Properties
Buying, renovating and selling a derelict real estate property is a challenging but rewarding investment; therefore, you should consider a number of reasons before diving in.
For example, under the Empty Dwelling Management Order (EDMO) in England and Wales, local councils can exercise the authority to repossess, renovate, rent, and manage derelict properties, but they cannot sell them. This means that only a handful of existing empty properties are usually listed for sale.
Ensure you double-check all the deeds to confirm that the individual selling you the property is the rightful owner. You should remember that deeply-entrenched conflicts over ownership are also a reason for the many abandoned homes.
Visit the property to check for squatters. If homeless people and other public members can quickly access the property, not only will this attract criminal activities but also accelerate the disintegration of the building. Therefore, once you buy the property, secure it quickly to avoid squabbles with squatters during an eviction.
It is important to note that it is demanding but lucrative to renovate derelict properties in a rising market. Derelict property with land for sale is located in the most horrible areas, which are prone to price falls as many potential buyers prefer living in convenient areas.
Claiming a Derelict Property
The rise in interest in abandoned houses and run-down properties that are unclaimed is fuelled by potential real estate investors seeking a property to renovate.
In the UK, you are allowed to claim ownership of a derelict property or abandoned houses. While the unoccupied properties may be abandoned, they still have their rightful owners out there. This mostly applies to huge country estates that are likely to have many idle structures.
Most of these property owners abandon them on purpose, and as time goes by, the derelict buildings gradually fall into disrepair. For example, during the Victorian times, owners abandoned many old buildings on their large estate used as manual workers’ residences or the main farmhouse.
Therefore, claiming a derelict property must start with the rightful owners possessing the land surrounding the property through a legal principle known as adverse possession. This is done by the owners erecting fences and living there for a decade if it is registered land and for 12 years if it land is unregistered.
As an investor, ensure you check with the UK Land Registry to give you accurate information on whether the abandoned land/property is registered or not.
Turning a Derelict Property into Dream Family Home
Many property owners dream of transforming a derelict property into a stunning family home. Imagine taking an old, run-down farm building or an empty cottage and turning it into a home fitted with exquisite furniture without breaking the bank! Perhaps only in the movies!
When it comes to renovating derelict properties in the real world, a number of factors may complicate the process, which could lead to a financially unsustainable outcome. For instance, Scottish newlyweds bought an abandoned stone barn so that they could convert it into a stunning family home.
Even though the couple pulled it off, the means to get to the end was rough. The renovation process was delayed for over one year after running into numerous problems, such as planning approval delays and unprecedented delays with contractors and constructors.
Even though the property owners estimated the renovation budget to the tune of £150,000, they ended up spending more than double the amount, with the closing bill of £330,000.
Even though this example may appear extreme, be prepared to face similar situations because they are common in the real estate market when it comes to renovating derelict property for sale. Always plan carefully and set accurate expectations to avoid several hurdles associated with derelict cottages/farms for sale.
If you want to buy a derelict property for sale, don’t be taken aback by the risks involved, but simply take the right approach. Since renovating a derelict or abandoned property into a dream family home demands special skills and lots of work, you should hire professionals like Tallbox to assist you as desired.
Most homeowners get discouraged from listing their house on the market once they realize that it needs costly renovation. But let’s face it! Very few homeowners allocate time and resources to redesign, reconstruct, and redecorate their fixer-upper. Therefore, you should start looking for the most effective ways of selling empty, run-down properties rather than occupied ones.
Options for Selling Cheap Abandoned Houses
“Cheap Abandoned Homes for Sale” is not a sign that you will find erected around neighbourhoods with derelict properties or on the roadside. Selling unclaimed derelict property with land naturally attracts potential homebuyers because of their affordability.
Rule of thumb is to go for abandoned properties that are not only in good condition, but also at the right location. This gives you an opportunity to sell them to the right homebuyers who can renovate them quickly and make a good return on investment after flipping them.
Below are some of the existing options for selling repossessed derelict houses that require a lot of work:
Sell the Derelict Property “As Is” with Virtual Renovation
Selling your derelict property as-is means that what the buyer sees is what the buyer gets without spending precious time and extra money on costly renovations. However, before selling it, you can use virtual staging to “furnish” your home digitally to show prospective homebuyers the potential of your run-down home.
Virtual renovation is one of the cost-effective ways to sell your derelict property as-is. These minor renovation works can be done quickly by virtual staging experts like Tallbox. All that remains is the right buyer with a renovation budget to breathe life into the run-down property and even sell it for a good profit later.
Hire a Realtor
It is important to hire a realtor or seek a skilled real estate agent’s advice to oversee the derelict property sale. However, rather than putting all the power in their hands, make sure you control the asking price so that you can effortlessly change it once you are ready to sell.
Instead of selling you derelict property yourself, consider the benefits of hiring a realtor. Their know-how and expertise not only endows them with in-depth knowledge about the market, but they can also give you insightful advice on renovating derelict property for sale.
Sell at Auction
Selling your run-down property at an auction is one of the most effective ways of getting the best sale price. Even though an auction house will charge you fees, the biggest advantage is that the initial set asking price can only increase and not decrease.
However, before the auction day, you need to set a reserve price, which is the lowest selling price that the auctioneer can reach. Therefore, sellers need to set realistic reserve prices to increase the chances of matching the winning bid.
Sell the Derelict Property Yourself
A real estate agent typically charges a service fee of up to 7% of the selling price. While the direct sale is not an awfully complex process, you need to understand the prerequisites of successfully selling your derelict property for profit by yourself and get maximum value for it. You will save a lot of money that you would have paid as realtors’ commission, usually a percentage of the property’s selling price.
Due to the rapid development of full-blown real estate digital technology, for sale by owner (FSBO) is popular among derelict homeowners. While you might not get a reasonable selling price for your property if you sell it on your own, you can use virtual staging to sell it quickly without making major renovations on it. Your vacant home will catapult to another level without upgrading and still selling it at a reasonable price.
Pro Tip: With virtual staging, consider hiring a home inspector to examine your derelict house. He/she will provide you with a list of all of the needed repairs and their respective fees, which you should disclose to all potential buyers, together with the virtually staged derelict home.
Seek the Right Derelict Property Buyer
If you are eager to sell your derelict property quickly without making major repairs on it, a serious cash buyer is the most viable option. We advise you to hire a real estate agent skilled in buying/selling run-down properties to help you find the right cash buyer and closely monitor the sales process.
The right buyer will buy the property in its current condition and pay for the legal fees in cash. Several realtors have connections with quick-sale firms that usually buy property in cash even if they need major renovations. Just ensure you read all their offers carefully.
Tips on Selling a Derelict Property Quickly
If you are interested in renovating and selling derelict real estate properties, or if you already own a vacated/abandoned house that needs some work, you can sell it using the below tips that attract buyers quickly.
Examine the Buyers Pool for Derelict Properties
Potential buyers of derelict properties usually see potential over perfection, which drives them to purchase empty homes and allocate vital resources to renovate them as desired. The following are the 3 types of buyers you should watch out for owing to their willingness to renovate derelict properties.
Flippers – Home flippers or investors prefer buying cheap abandoned houses at auctions, renovating them, and then selling them at supernormal profits. Once a flipper sees the potential your derelict home, contact your realtor to determine its value by running a comparative market analysis of similar properties recently sold in the vicinity. Only settle for a decent price without allowing the flipper to trick you.
Deal Hunters – These are buyers who prefer living in a particular area but can only afford renovating a derelict house and residing there for some time before moving into the prime neighbourhoods. Deal hunters are usually ready to purchase a derelict property with land for sale because they’ll have enough time to upgrade it progressively and build equity in the process.
Remodelers – These buyers have the financial capacity to buy a home in a particular location, but existing residential properties lack most sought-after features. Therefore, they are potential derelict homebuyers because it gives them an opportunity to design the run-down houses to match their unique standards.
Complete All Minor Repairs
A well-maintained vacant home will not only be visited by many prospective buyers, but it will also deter squatters and criminals. Minor repairs do not cost much, and even if you want to sell the home “as-is,” it is advisable to inspect the house with your realtor to ensure you fix all of them. Minor repairs include but are not limited to:
- Cleaning grout
- Fixing leaking pipes
- Replacing cabinet knobs
- Installing new light fixtures
- Clearing bushes and landscaping
- Deep cleaning bathrooms and toilets
- Replacing broken window panes and hinges
- Covering holes on the walls and painting the exterior
However, neglecting such crucial repairs can instantly repel a potential buyer so ensure the lawns in your derelict home for sale are mowed, flowers watered, compound decluttered, and driveway snow-plowed.
Secure All Entrances to the Derelict Property
If you want to sell your run-down house, ensure that you secure it from squatters and criminal activities. Securely lock up all windows and using a lockbox key to avoid confrontations with squatters in the presence of potential buyers.
If the public can access the property easily, not only will this accelerate the disintegration of the building, but also attract criminal activities. Therefore, once your vacant home is ready for sale, secure all possible entrances to keep off trespassers attempting to access it.
Stage Your Derelict Home for Sale
Staging can easily attract potential buyers to your property. When you use virtual staging, which incorporates 3d furniture and related virtual furnishings, buyers will see the potential of turning the empty house into a stunning family home.
Tallbox digital staging experts are skilled in taking photos of derelict houses and tweaking them with appropriate furniture such as couches, chairs, and tables to show potential buyers the potential of the interior and exterior of your space.
Highlight the Unique Features your Derelict Property
The astounding features of your derelict home make it unique, but if you don’t highlight them, you’ll be losing many potential buyers looking for specifics. You need to market your house’s best features because they could make all the difference in closing a sale.
Make sure you mention potential buyers things like great views, a fireplace, closet size, master suite, a home office, a patio, big storage, an open floor plan, garage space, big windows for natural light, etc. You can also describe neighborhood features, such as proximity to parks and shopping centers.
Leave the Lights On
All derelict homeowners should ensure that the empty home is well-lit, especially at night. A gloomy house may leave potential buyers with the impression that it needs more repairs, and eventually, the seller gets a lower offer price for it.
Lighting interior lights once the sun is down can be achieved by setting timers to trigger the switches on and off at a specified time. Exterior lights can be controlled by fixing motion-activated lights to keep the derelict property well-lit and portray some human presence in the home.
Reasons Your Derelict Property is not Selling.
You bought a derelict property, renovated it, and put it on the market for sale. But the house has stayed on the market for several months with very little traffic from potential buyers. The following are some of the major reasons your run-down property is not attracting the right buyers.
You Have Overpriced the Property
Its common sense that if you overprice the value of your home, you are simply not going to sell. Since overvaluing your derelict property can put off buyers instantly, it is important to find ways of determining its true value. The biggest mistake most homeowners and realtors do is adding the cost of repairs to the asking price.
To avoid overestimating your derelict property, conduct a comparative market analysis of similar properties recently sold in the vicinity to know their selling prices before coming up with yours. If you had already advertised with a higher price, and similar properties in the areas are selling for less, you will have to bring down your asking price.
It Lacks Curb Appeal
Homes that lack curb appeal exude a homely feeling! Before you advertise your derelict home for sale, you should ask yourself: does the exterior of my property attract or repel potential buyers who are passing along the streets. If more potential buyers are eager to view the interior of your home, then its curb appeal is making a great first impression.
Low-cost DIY improvements can boost the curb appeal of your derelict property with land for sale. It would help if you considered adding stylish elements to your house’s exterior to transform it into a home. When potential homebuyers pay a visit, they won’t help but notice the well-kept lawn, colorful mailbox, warm porch lights, window boxes, welcoming doormats, etc.
You Have Not Staged the Property
Statistics show that homeowners who set aside 1-3% of the asking price to cater for the cost of staging their property professionally usually find buyers willing to pay 5-10% higher than the set price. If you want to help potential buyers imagine living in the renovated version of your derelict house, consider hiring a virtual staging expert to highlight every room’s features.
Selling your run-down house without staging it will make potential homebuyers get discouraged if they cannot figure out how to use the existing space. Staging your derelict property digitally incorporates furniture and stunning decor to inspire buyers with interior design ideas. As buyers take a virtual tour of the property, they should feel at home.
Your Derelict Home is in a Bad State of Disrepair
Even if your home was once considered sturdy and lavish, the older they become, the higher their likelihood of falling into disrepair. The more repairs your derelict property needs, the lower the likelihood it will sell because many homebuyers are not ready to incur renovation costs, even for minor repairs.
Most abandoned properties are usually centuries old, making them prone to detrimental factors, such as bad weather and squatter invasion. Once your derelict property is unable to withstand years of neglect and falls into disrepair, be ready to receive your council’s compulsory purchase order.
You Hired the Wrong Realtor
One of the wisest decisions you can ever make when selling a derelict property is hiring the right real estate agent. A skilled, reliable, and accessible realtor can help you sell your home quickly. However, real estate agents who claim to market your derelict property devotedly but take months or even years to close a sale are worth firing.
To work closely with realtors, actively seek feedback from them once potential buyers view your derelict property to see whether you can pull some strings to increase the likelihood of closing a sale. An effective old trick of appraising realtors’ performance is using a mystery shopper to pose as a prospective buyer. Their feedback will help you decide whether you’ll retain your realtor or hire a new one.
Buying derelict homes is a lucrative strategy for investing in real estate that we recommend because it is ideal for house flipping and executing an investment strategy for renting properties.
If you are an ambitious homebuyer or enthusiastic real estate investor, you can begin small by purchasing cheap abandoned houses as an income property. It would be best to create a strategy for finding and buying them quickly before other veteran investors notice them.
3 Key Steps to Buying Derelict Property
Since real estate agents do not list abandoned houses for sale, you need to arm yourself with key approaches that you can effectively use to identify and repossess derelict homes without trespassing on private property even after they have fallen into disrepair.
Step 1: Identify the Derelict Property
Did you know that the very first step taken by 44% of all real estate buyers is an online home search? The same applies to those ready to invest in derelict property and farms for sale. Therefore, if you want to buy, renovate and flip cheap abandoned houses at specific locations, browse real estate websites to get more information about them. Most derelict properties are either newly abandoned or are on the brink of foreclosure.
To increase your success rate, start by browsing real estate websites and property databases using specific keywords, including ‘under appraisal,’ ‘must sell,’ ‘below market value,’ ‘immediate possession,’ etc. You will be presented with an exhaustive list of available derelict properties, unclaimed land, and other properties for sale in your selected area to choose from.
Also, use bank listings to scout abandoned houses in prioritized areas of your choice as banks regularly keep online listings of properties for sale after foreclosure. This is a good way to the outside of your city which can be used as a vacation rental.
- Drive Around Selected Localities
Physically visiting an area that interests you with regard to buying a derelict real estate property can give you a competitive advantage over other realtors. You can set aside every Sunday afternoon, for example, to take a drive around various potential areas to find cheap abandoned houses. Take a friend with you not only for safety but also for second opinions.
As you look around, take notice of derelict properties’ characteristics to help you identify the right one. Noticeable signs of abandonment include boarded-up windows or unkempt lawns. You can also lookout for any “For Sale by Owner” signs, which are usually common with derelict properties. However, beware when trespassing private property, even if it looks deserted in the middle of nowhere.
- Ask Adjacent Neighbours about the Property
Adjacent neighbors play a significant role in providing key information to those interested in buying a derelict real estate property. To avoid any confrontations with homeowners of abandoned properties, knock on immediate neighbors’ doors to inquire more about them. Introduce yourself, be polite, and if they are willing to talk, ask for their opinions with specific questions, such as:
- “Who used to live there before?
- “How long do you think the property has been empty?”
- “When did you realize it was actually abandoned?”
If the derelict property occupants were either good or bad people, the neighbors might take this opportunity to fill you with important information about the house. Before you leave, ensure you ask them whether they have the homeowner’s contact information.
- Examine the Derelict Property Cautiously
Never enter any property that looks abandoned without taking caution not only for your safety but also to avoid being sued for trespassing. Even without entering an abandoned property, you can unearth key information to unravel its mystery. For example, if the mailbox has uncollected letters, try to read the date indicated on the bottommost envelope to estimate the time when the occupants were last home.
Cluttered yards and overgrown grass can also help you determine the length of time the property has stayed abandoned. Besides, if the driveway has cracks, it could signify that the property has been abandoned for quite a long time. Finally, you can take the risk of finding out whether utilities are running from the power meter box, which is usually in the property.
- Visit the County Clerk’s Office
If the derelict property has a street address, visit the office of the county clerk to look up records about various abandoned homes in the city and county, along with property tax histories, current appraised value, etc. This will provide you with particulars about the last owner of the derelict property as specified in the government’s property ownership records.
Even if the deed does not indicate the owner’s name, most county governments usually assume that the individual who paid the last property taxes is the property’s rightful owner. It is important to note that it may come across derelict properties under the name of a mortgage company or bank.
Step 2: Explore the Derelict Property
- Gather Key Information
As soon as any derelict home has caught your attention, be eager to find out why it was abandoned, or has been vacant for a long time. Ask yourself questions, such as:
- How old is the property?
- Is there anyone left to manage the property?
- How many immediate properties are occupied?
- Was the property damaged by a natural disaster, e.g., fire, tornado, flood, etc.?
- Did the family die from a tragic event?
Seeking answers to such information will help you get in contact with the ‘current’ or ‘former’ homeowners and give you a competitive advantage when advertising various derelict properties in the location.
- Seek Permission from Derelict Homeowners
Technically, all abandoned houses have owners. Therefore, trying to access them without the owner’s consent even when they are empty is considered trespassing. If the property can fetch good profit after renovation, it is important to ask the homeowners for the asking price and buy it “as is.”
To avoid heavy fines or jail time, find ways of tracking down derelict property owners to allow you to explore their property. Unless the deed has its name, locating the owners could prove challenging, especially if the ones on the record are dead or a long history of owners. To check-in with the owners, please write a letter to them detailing your request, e.g., taking photos of the property.
- Report to Local Authorities
If your efforts to track down run-down property owners are futile, notify local authorities about the abandoned house, starting with the police. The local police unit may give you the needed go-ahead to explore the property, which also protects your safety and any legal ramifications.
Local police usually act as bodyguards for explorers who are eager to see various exotic buildings. In the same way, local authorities have the capacity to escort you to a property that looks uninhibited for a long time, provided that you explain your intentions to them in a convincing manner. If it’s your subsequent visit, share some photos of the properties for authenticity.
- Protect Yourself
You never know what you’ll find in an abandoned house, which makes it very risky to explore even in the best of situations. Therefore, it is advisable to avoid walking into the property during night-time and always have a companion by your side when exploring the derelict property.
Ensure you fully charge your phone, and as soon as you enter the property, regularly check your phone for an active network signal. Wear protective clothing, such as knee-high boots to protect your feet, long-sleeved shirts to cover your arms, trousers to protect your legs, masks to facilitate your breathing in a dusty environment.
- Don’t Cause Further Damage to the Property
One of the famous mantras by urban explorers is that when exploring a territory, “take nothing but photographs” and “leave nothing but footprints.” This mantra is crucial for protecting run-down properties from further crumbling or falling into disrepair. Even though you may accidentally knock down some elements as you maneuver your way through the property, avoid changing any settings on purpose.
If you successfully tracked down the homeowner who eventually granted you permission to check the derelict property, it is prudent to give them feedback. Start by emailing a digital version of the photos you took while exploring the property or a thank you card to express your appreciation.
Step 3: Repossess the Derelict Property
- Reach Out to the Property Owner on Record
The rightful owner of the derelict property can be ascertained by visiting your county clerk’s office to look up records of various abandoned homes in the area, along with the properties’ tax histories, current appraised value, etc. According to recent research by Realtor.com, those who own properties marred with tax or lien problems are always quick to sell when an interested buyer comes along.
You can send a postcard to the owners in case you find their mailing address. However, if the run-down property belongs to a mortgage company or a financial institution, look up their contact and make a phone call. Start by introducing yourself and expressing that you are interested in purchasing a property and you need further directions.
- Consult a Real Estate Agent
Once you have exhausted all avenues and strategies to get hold of the derelict homeowner, you can hire the services of an experienced real estate agent to guide you through the process of repossessing the derelict property. A real estate agent can provide homeowners with key information about properties in different regions as well as implementing effective ways of buying derelict properties.
You can quickly buy a derelict home with help from a local agent with admirable experience in buying/selling abandoned properties. Real estate agents can help you analyse your local market comprehensively, interpret comps, or the most recent comparable sales as well as the latest sales patterns. Apart from their ability to access exclusive property information, they can also connect you professionals like attorneys to provide more buying solutions.
- Conduct a Property Title Search
It is important to note that a number of title companies charge about $50 to carry out the search. The report will reveal the particulars of the homeowner, along with details about any unpaid property taxes or liens.
If you want to receive the title report without charge, visit the country offices. However, you might be provided with the name of the property owner only. Your attorney can help you through the process of getting a title report of the derelict property by requesting for a copy from a title company.
- Consult Your Attorney About Buying the Derelict Property
Once you decide to purchase a derelict property, you need informed advice from an experience attorney. For instance, if your home inspector pinpoints that an abandoned house is in a bad state of repair, your attorney can help you negotiate with the seller about the requisite renovations prior to closing the sale.
Since counties and cities have passed different laws governing the buying/selling of abandoned properties, an attorney is the most suitable professional with the capacity to navigate these laws. Furthermore, attorneys can help you buy an unclaimed derelict property or an abandoned home with an untraceable owner.
- Place a Bid to Buy the Property
Once you are convinced to buy the property, conduct a thorough assessment to help you calculate the costs involved to make major and minor repairs. You should also include the estimates of the appraisal fee, title insurance, inspection fees, legal fees, and closing costs before quoting a bid to the owner.
If the owner was willing to sell the property from the get-go, you might buy it for less than its market value. If the owner has accrued property taxes, you should deduct the amount from the asking price because it will be transferred to you once you buy the home. Your realtor should actively assist you to come up with a competitive and negotiable bid for the derelict property.
Buying and selling repossessed houses address the demand for residential housing in different regions. Renovated derelict properties provide people with reasonably priced housing to rent or buy, improves the neighborhood’s ambiance, and discourages antisocial behavior, such as vandalism, squatters, etc.
The quickest way to sell derelict properties is using digital services as virtual staging, virtual refurbishment, etc., provided by Tallbox. We offer free no-obligation quotes for buyers, sellers, agents, and investors who are eager to sell their houses quickly.
Email or call us today and we will be happy to help.