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Selling a Condemned House
Most people assume that condemned houses are dwellings set to be demolished because they're too far gone. While this is true in many cases, there are also condemned houses that can actually be saved; however, the process won't be easy.
Whether or not you can sell a condemned house depends on the laws where you live. But in most cases, a sale is possible if the home is repaired and it passes the re-inspection of the local authorities. If the repairs aren't possible for the condemned house, it can't be sold as a structure; therefore, you would only be able to sell the land it is on.
There's too much to learn about condemned houses, from why they are tagged as such and how you go about selling them. If you're intrigued to know more, stay with us until the end!
What is a Condemned House?
A house is considered condemned if a local government body deems it unsafe to live in. This means that the property has code violations and living in it is prohibited. It is also possible for new houses to be condemned if the contractors do not follow building codes.
When authorities condemn a house, they seal it and put a warning sign so no one can enter. Typically, condemned houses can only be considered inhabitable again if it is repaired, rehabilitated, and passed the inspections of the authorities.
While condemned houses may seem like a lost cause, they actually aren't. It is still possible to remove the home from condemned status and this would depend on the reasons why it is tagged as uninhabitable in the first place.
What are Grounds For House Condemnation?
There are a couple of reasons why houses reach a condemned status. Regulations vary per location, but generally, condemning happens when:
- The property has been abandoned for more than 180 days.
- The home is very unsanitary. There may be infestation issues, black mold, or other hygiene issues.
- The home has specific hazards that make living in it unsafe.
- The house has structural damage because of deterioration. This may also be caused by a storm, water, and fire damage.
- The home doesn't have sufficient utilities such as water, electricity, sewer, etc.
- The house has been used as a place for manufacturing toxins and drugs.
Note that condemned homes are not labeled as such for only one reason. In most cases, they have a lot of hazards that appeared over the years.
Moreover, it is also possible for a house to be condemned by the local government because they would use it for public projects such as highways, airports, schools, etc. This can happen due to eminent domain authority.
When eminent domain is exercised, the homeowner is compensated. However, the process typically causes a headache for owners.
How Long Does it Take to Condemn a House?
The process of condemning a house could last from weeks to months depending on a lot of factors such as why it is being condemned, regulations of the municipality, legal hearing, etc.
Generally, the owner would be notified that the house violates a certain code related to health and safety. The local neighborhood may also be informed that the property is condemned and the owner needs to fix it.
If the owner failed to make corrections, there would be a legal hearing where the house may face condemnation.
When a house is tagged as condemned, the owner would again be given 30 to 60 days to make necessary repairs and other corrections, request for local authorities to pay a visit and inspect, and apply for new government permits.
This is when most homeowners want to sell their condemned home to investors and cash buyers because of time constraints and the fact that repairs cost a lot.
If the requirements of the local government weren't met, the home would then be officially deemed as uninhabitable. Selling it would be impossible at this point.
What Happens When a House is Deemed Uninhabitable?
When the government deems a home uninhabitable or condemned, all its inhabitants are asked to leave immediately. Signs are posted on the condemned property to alert everyone in the neighborhood that the house is uninhabitable.
Often, to ensure that no one would live in the house while it is condemned, the government shuts down its utilities. Meanwhile, if the house is really a hazard and already too dilapidated, it is demolished.
This is also the case when the house is seized using eminent domain. The house is demolished to facilitate the construction of a public project.
Can You Still Live in a Condemned Home?
The very reason why a house is condemned is because it is not suitable for occupation. Thus, in most cases, you cannot live in a condemned home. But then again, this could vary based on location and if you have made efforts to fix the property.
It is suggested to consult an attorney to understand your rights when your house faces condemnation. You can also directly speak with the government unit in charge for clarification if you still want to occupy the home.
On another note, there are cases when unwelcome visitors such as squatters, trespassers, or vandals occupy the condemned property. While this is also not allowed as per the rules of the local government, this may be unavoidable because the house is sitting vacant.
If you don't want this to happen, you must decide whether to sell your house or make repairs immediately.
Can You Sell a Condemned House?
Depending on where you live, you may still sell your condemned house. There are actually two ways to sell a house that has been condemned by the authorities.
The first is to make all the corrections asked by the government and proceed to sell. This means that you would need to make necessary repairs and renovations so the house would be in an acceptable condition.
After you make repairs, you would need to apply for inspection by the right authorities. When they deem it habitable, you can proceed to market the house just like any other real estate.
Note, however, that it is hard to apply for a mortgage for condemned homes, so finding a retail buyer could be a challenge.
Your other option when selling a condemned house is to sell it as-is. This is suggested if the house is beyond repair. Technically, when you sell the property as-is, the buyer pays for the land it stands on, not the home structure because it no longer has value.
These home buyers who purchase condemned properties as-is could then demolish the house and build another.
For properties that were condemned through eminent domain, it is a totally different story. Since the government will transfer the ownership of the house to public property, the homeowner will not be able to sell it.
The good thing, though, is that the government will provide compensation. This is what we call a pro-tanto award.
The government will furnish you with a written offer for the condemned property in consideration of its appraised value.
If you think the house can cost more, you can decline their offer, have the property appraised to get its market value and submit the appraisal to the government unit in charge. Typically this will go to court.
If the process of condemnation by eminent domain seems daunting, seek legal counsel.
How to Sell a Condemned House
If the condemned house only needs repairs or renovations so it can be declared habitable again, then you still may be able to get the most value out of it. Buyers prefer a move in ready property.
Here's what you need to know about selling a condemned house on the real estate market:
Address the Violations
All the code violations the condemned house was cited for are in the letter sent by the government regarding the condition of the property.
You must take action regarding each violation so the property can be habitable again. That may mean removing black mold, dealing with an infestation, decluttering, etc.
If there are only a few areas that need repair, hiring a contractor can fix your problem. You can have the property re-inspected by the local authorities and you will be issued a Certificate of Occupancy.
After this, you can get in touch with someone buying a condemned home.
Deal With Major Repairs
Typically, if the condemned house needs major renovations such as fixing structural damage and not just a simple repair, hiring a contractor may not suffice.
To illustrate, you may have to hire an architect to draw plans before you can sell your condemned home. This can cost you a lot and may not be worth it if the market value of the home is low even after making repairs.
If the renovation would involve electrical systems, you would also need to provide the local government with a plan. Permits can incur a lot of money and be labor-intensive.
When the plans have been approved and you were issued the necessary permits, you can then proceed to find people who can do the work.
As the renovations are made, the local authorities will inspect to see if the approved plans are being followed. If they are, that's only when you will be issued a Certificate of Occupancy and will be given a go signal to sell the condemned property and find buyers near you.
Choose a Way to Sell the Condemned House
When you are ready to sell the condemned house, you can choose amongst three options on how to proceed.
For Sale by Owner (FSBO)
For sale by owner or FSBO means selling a condemned house independently with no real estate agents involved. Selling a condemned house on your own may prove to be too much of a task since you will do all the work yourself.
To illustrate, you would have to price and market the condemned property on your own, ensuring that it reaches the right homebuyers and that it doesn't sit on the market for long.
This is difficult because, usually, mortgage companies do not want to finance purchasing a condemned property.
Even if you succeeded in getting offers, you would still experience the most challenging part of selling a condemned house FSBO— negotiating with homebuyers.
If the condemned property is not renovated to a point where it looks like a typical property, expect homebuyers to make offers that aren't competitive. It would be difficult to negotiate with them, especially if you don't have a background in real estate.
Real Estate Agents
There are real estate agents who are experts in selling condemned houses and they could make the process of selling your property less work.
For starters, a real estate agent can help you price the condemned property based on its fair market value. They can do this while considering the expenses you had during the renovation.
They can also find the right buyers and shoulder the burden of negotiating for a fair sale price.
Note, however, that hiring a real estate agent to sell your condemned house doesn't come for free. On average, you would need to pay a real estate agent up to 6% of the sales price.
This is a lot of money, and it could leave you with little profit in the end since you still have to account for the expenses of the renovations, marketing, paying off your mortgage, and closing costs.
Cash Home Buyers/Real Estate investors
Your best option when selling a condemned property is a cash home buyer or real estate investor that can pay cash right away.
These cash buyers and investors usually move fast, and they'll give you a fair cash offer just as they would with regular real estate.
Most investors and cash home buyers buying a condemned house have a team they regularly employ to fix houses. That means they'll buy your property as-is and after fixing it, they either sell or keep it as a rental.
If in case your condemned property is really too far gone and cannot be considered a structure anymore, they may still purchase your property with a plan of demolishing the house. In other words, what they're buying from you is the land where the condemned property stands.
A cash home buyer is also ideal if you want to save on closing costs and commission fees. Further, since they are your direct buyer, you don't have to go the traditional route of marketing your condemned property.
Related Questions to Selling a Condemned House
Can You Just Leave Your Condemned House?
Yes, you can leave your condemned house and do nothing about it if you can't manage to pay for necessary repairs or it is built in an area where there are a lot of surrounding hazards. In most cases, doing this will give the government the right to seize your property.
The only drawback of doing this instead of having the condemned property repaired, demolished, or selling the land it stands on is that unwelcome occupants such as squatters may use it as their dwelling.
Is There a Difference Between a Condemned House and an Abandoned House?
While most properties that are condemned are abandoned for a long period of time, it doesn't mean that the two are entirely similar.
Condemned properties are tagged as such because they violate a certain code or are being seized by the local authorities to facilitate a public project.
Meanwhile, abandoned houses are dwellings that are vacated due to a number of reasons like foreclosure crisis due to missed mortgage payments, the owners passed away, etc.
It is important to note, however, that when a house is abandoned and is not maintained for a long time, it may eventually violate safety codes and be condemned by the government.
Final Thoughts: Can You Sell a Condemned House?
Condemned homes are not a lost cause. They can still be sold and homeowners can still get some value from them. However, when choosing to sell a condemned house, the owner is under time pressure.
When repairing a condemned house makes no financial sense and the process sounds stressful, that's when it is suggested to sell to a cash home buyer.
Here at Sell My House Fast, we'll buy your condemned house as-is so you can save on the costs of necessary repairs or renovations. We'll also cover the closing costs so you don't have bring any money to closing.
Fill out the form below or give us a call at (844) 207-0788 to get a cash offer on your condemned house!