What Happens To A Condemned House? (Definition + Buy & Sell)

Thinking about selling your condemned house? Perhaps you want to buy one as an investment or a second home?Either way, you’re in the right place.At first glance, dealing with a condemned house may feel like a burdensome hassle. However, it could also be a hidden opportunity when you use the right approach and strategy.This is the case whether you’re in the buying or selling end of the process.Keep reading to learn why and when a house gets condemned, as well as how to determine whether your best option is to buy, sell, or fix it.Let’s dig in.

What Happens to a Condemned House?

Before getting into the details of what happens to a condemned house, you need to initially understand what this designation means and why a home would get condemned in the first place.After that, you will get a better idea of what your options look like when a house gets condemned and which of them suits you best.

What Does It Mean When a House is Condemned?

When a house is condemned, it means that the government has the legal right to take it away from its owners.City and county governments across the U.S set building codes, safety rules, and livability standards. Local homes and other buildings must follow these rules.Most of the time, a home is condemned for alleged code violations or based on claims that it is unsafe or uninhabitable. This can happen for various reasons.

Why Would a House Become Condemned?

Why Would a House Become Condemned

A house becomes condemned when its condition violates the local legal codes or makes it unsafe to live in.Here are some examples of why a house would be condemned:

  • Abandonment – Homes that are abandoned by their owners and left to deteriorate could get condemned, especially when they’re in a very bad condition.
  • Black Mold – If black mold starts to grow in the home (which is common in states that frequently experience floods), it becomes uninhabitable. This is because the air in moldy buildings is toxic and dangerous to inhale.
  • Excessive Clutter – When a large amount of clutter piles up in the house, it will be prone to getting infested with termites and/or pests.
  • Fragile Flooring – The floor could collapse if the furniture is too heavy or a certain number of people are in the house.
  • Plumbing Problems – A faulty plumbing system may cause flooding or damage the water pipes. Moreover, plumbing issues can create other problems that make the home unsafe to live in, such as black mold.

Keep in mind that these are just a few examples. Every county and municipality has its own set of condemned house rules and criteria, including why and when they can condemn a home.

How Long Does It Take to Condemn a House?

The amount of time it takes to condemn a house is different from one area to another.However, when condemning a home, local governments will take these general steps:

  1. Identify the Violation – Some counties and municipalities regularly conduct surveys and examine properties to look for homes that are unsafe or noncompliant with local codes. Others rely on residents who are living next to a condemned house to report it.
  2. Inspect the Property – Once the government receives a complaint or spots a home in a bad condition, they get in touch with the owner and inspect the property.
  3. Inform the Owner – If the county or city’s investigator determines that the home is uninhabitable or its condition violates the building laws, they will give the owner a condemned house notice. This document outlines the repairs that need to be made and when they should be completed by.
  4. Levy Penalties and Fines – The local government requires the homeowner to pay monetary penalties and fines when they don’t make the repairs on time or completely ignore them.
  5. Condemn the House – If the owner continues to neglect fixing the property, the city or county will condemn and seize the house. When this happens, the government estimates how much the property is worth and reimburses the owner, but they also take the home’s condition into consideration and deduct the repair costs from that amount.

Some local governments have flexible condemned house rules. As an alternative to repairing the home, they give property owners the option to sell it.

How To Sell a Condemned House (Strategies & Methods)

How To Sell a Condemned House (Strategies & Methods)

If you want to place your condemned house for sale, there are three ways for you to do so.

Finding a Real Estate Agent

Look for a real estate agent who is willing to help you sell the condemned house.The main advantage to working with a professional agent is that they already have a network of potential buyers. Some of them may even have clients that specifically want to buy condemned houses.Having said that, since condemned homes tend to be in bad shape, many realtors and buyers consider them to be risky investments.Because of this, if you want to work with a real estate agent, you might have to do some research and contact multiple realtors until you find one who is willing to sell a condemned house.

Selling By Owner

Another way is for yourself to work directly with buyers who are looking for a condemned house for sale.You have multiple options for selling the house as its owner. Here are a few of the most effective ones:

  • Contact potential buyers and/or investors that you ‌know.
  • Attend networking events for real estate professionals and investors.
  • Use online platforms like Zillow and Realtor.com.
  • Put up a ‘For Sale’ sign in front of the house and include a working phone number.

When you directly sell the home, you don’t need to worry about finding a realtor who is willing to offer a condemned house to their clients.You also get to keep the entire amount that you sold it for. Real estate agents, on the other hand, take a commission out of the sales proceeds.There is a main downside to selling the condemned home as an owner: Since buyers already find condemned houses to be risky, they might prefer to purchase them from a professional real estate firm rather than an individual owner.

Selling by iBuyer

iBuyer is a website that connects home sellers with local buyers and investors who want to quickly purchase a property.iBuyer may buy your condemned house from you, take care of repairing and cleaning it, and then list it for sale.This can save you a lot of time and money. Moreover, iBuyer has a near-instant process, and your home might be sold very quickly.Before you put your condemned house for sale on iBuyer, make sure that you have somewhere else to move to after you sell it. For example, you can sign a rental lease, move in with a friend, or buy another home.

How To Buy a Condemned House

How To Buy a Condemned House

You can buy a condemned house by relying on the same three methods for selling it.If you want to buy an already-seized condemned house from the government, the most common way is to purchase it when it’s being auctioned.This is because local officials sell condemned houses that are in their possession through public auctions.There are certain advantages to buying a condemned building. Here are the most noteworthy ones:

  • Discounted Price – The lenders that issued the home’s mortgage loan (when it was in its original condition) are willing to quickly sell it and for a low rate. Otherwise, when the government condemns the house and/or the borrower defaults on the loan, the lender will not be able to get any of their money back.
  • Flipping Opportunities – If you buy a home that’s in a bad condition and repair it (a practice known as ‘house flipping’), you can sell it for a bigger value and earn a profit.
  • A Cheap Second Home – Some buyers will turn the condemned house into a second home by purchasing for a low price and then gradually fixing it.

With that being said, there are also downsides that come with buying a condemned house. Among them are the following:

  • Lots of Regulations – You must get the approval of the city or county government that condemned the home. They might require you to prove that you will fix it. Your local authorities may have additional condemned house rules.
  • Repair Costs – At times, the repair costs can end up being much more expensive than what you initially thought. This could impact your proceeds if you plan to sell the house.
  • Unknown Problems – If you discover certain damages after buying the home that you weren’t aware of beforehand, you have to pay to fix them out of your own pocket.
  • Inherited Debts – Once you purchase a condemned home, you are responsible for the debts that the previous owner didn’t pay and any liens on the property, even if you weren’t aware of them.

To avoid running into these problems, consider getting a verified and reliable property report.You want a report that shows you the history of the home, pictures of the property, details about its room sizes and previous repairs, as well as whether it has any liens or judgements against it.By knowing these details before purchasing the condemned house, you will put your mind at rest and ensure that you don’t run into any unwanted surprises after you buy it.In addition, a property report might help you narrow down your options when you look at a list of condemned houses for sale.

Where To Find a List of Condemned Houses for Sale

Where To Find a List of Condemned Houses for Sale

You can find a list of condemned houses for sale in your area on different real estate listings websites and platforms.Here are some of the best real estate websites for doing so:

  • Foreclosure.com – Arguably the best website for finding a condemned house for sale, Foreclosure.com’s search tools include city and/or sheriff department-owned homes, fixer uppers, as-is deals, properties that are in pre-foreclosure status, and those that were already foreclosed.
  • FSBO – FSBO’s website has listings of properties that are in pre-foreclosure status and previously foreclosed houses that are being sold by the sheriff’s department.
  • Realtor.com – Realtor.com also allows you to search for condemned homes through their foreclosure listings.
  • Redfin – Redfin is another widely-used real estate website that lets you find foreclosed homes in your county, city, and/or zip code.
  • Trulia – In addition to their list of foreclosed homes, you can further narrow down your search on Trulia to condemned houses that are for sale by either their owner or a real estate agent.
  • Xome – Xome has comprehensive search tools that lets you browse foreclosed homes and properties that are being auctioned. Moreover, you can use Xome’s calendar to find upcoming auction sales in your local area.
  • Zillow – Zillow’s listings of foreclosed homes for sale can help you with finding a list of condemned houses near you.

Before you buy one, check the local condemned house rules and codes on fixing it. After that, you can decide whether the time and cost of repairing a condemned house is suitable for you.

Can You Fix a Condemned House?

Yes, you can. However, the process for fixing a condemned house depends on whether you’re the owner or the buyer. It is also different from one locality to another.If you’re a homeowner who received a condemned house notice, read it carefully and go through the repairs that the government is asking you to make.From there, try to estimate how much they would cost. Some problems, such as excessive clutter and plumbing issues, are relatively easy and cheap to fix.Having said that, you may be required to make major condemned house renovations or bulldoze the entire building.When this happens, think about whether moving out of the home (and allowing the government to seize it and compensate you) is more financially advantageous for you than paying for the repairs.Meanwhile, if you’re a buyer who is wondering whether you can purchase a condemned house and then fix it, consider these factors as you make your decision:

  • Government Approval Timelines – In some areas, the local condemned house rules will require you to get the government’s permission and demonstrate that you can fix the condemned home when you buy it. The amount of details that you need to give your local county or municipal officials, as well as the time that it takes to get their approval, should influence your decision.
  • Financing Options – Since condemned homes are high-risk assets, many lenders don’t issue loans to those who want to buy them. If you can’t find a traditional mortgage issuer that’s willing to finance your purchase, think about your other options. For example, you could get a loan from a private lender or pay for the purchase and repair costs yourself.
  • Debts on the Property – Your area’s condemned house rules may require you to ensure that the selling homeowner doesn’t have any unpaid property taxes or debts on their home before you buy it. Consider checking your local delinquent tax list properties. Otherwise, after you purchase the property, you could end up paying property taxes and delinquent debts on behalf of the previous owner.

As you make your decision, carefully weigh each of these factors.Note down any concerns or questions that you have so that you can discuss them with the real estate agents and/or lending professionals that you will work with.

Frequently Asked Questions About Condemned Houses

Frequently Asked Questions About Condemned Houses

Can You Live in a Condemned House?

You can live in a condemned house only if you make the needed repairs within a certain amount of time. You can find this deadline on the condemned house notice that you received.If you don’t take care of the condemned house renovations by the deadline, you have to vacate the property and allow the government to take it.

Should You Fix a Condemned House?

You should fix a condemned house if you can afford to, especially when the government isn’t offering you a fair reimbursement for seizing the property.If your local condemned house rules allow you to sell it, compare the cost of fixing the home to how much you would get for selling it.

Can You Enter a Condemned House?

You can’t enter a condemned house because of the health and safety risks. For example, while you’re inside, the floor could collapse or electrical problems may cause a fire.Most of the time, condemned houses are sold in an auction and the buyers don’t see the homes in person.

What is a Condemned House Notice?

A condemned house notice is an official document that notifies homeowners that their property’s conditions violate the local rules and building codes.The condemned house notice goes over the repairs that the owner must complete and when they need to be finished by.

Condemned House vs Property: What’s the Difference?

The term ‘condemned house’ refers to a privately-owned home that is unsafe to use or in a condition that violates local building codes.A ‘condemned property’ is a broader term that describes any building that’s in this situation, including private homes, apartment complexes, commercial/office spaces, malls, and others.

Buy, Sell, or Fix: What To Do With a Condemned House

Now that you know when, why, and how a house can get condemned, you can look at your options and determine which of them suits you best.As a buyer, a condemned house could be an investment that helps you reach your larger goals. Maybe it’s second home that you’ve long wished for.As a seller, a condemned house notice may be the wake up call ‌you needed to renovate your home. Alternatively, it could be a chance to cash out on your existing property and get a fresh start in a new home.Either way, ‌use the information that you learned from this article to turn that condemned house from a hidden opportunity into a brand-new livable reality.