Occupants, oftentimes, are the first to feel the negative impact of foreclosed home as they will suffer the anxiety of financial distress and possible eviction. The secondary effect is the toll that this process takes on the neighborhood. As one of the home owners within the community with foreclosed property, you will realize that you are also greatly affected when you are told that your home is overpriced because of the distressed home sale. Distressed property can lead to lower property values and local tax revenues. It is said that a neighbor’s foreclosure can lower your home’s fair market value by up to 1%.
A distressed home is easily recognized as one with neglected doors, plywood over windows, untended yards, and possibly inhabited by drifters, or worse, drug dealers. One of the disadvantages of buying a foreclosed home is the fact that it is sold “as is” and buyers have no guarantee over its condition. Occupants who are losing the property will only think of salvaging their situation by selling the built-in appliances and ripping out metal plumbing for scrap. The “as is” condition is possibly the major reason of the drop in value because of the prospective buyers’ perception of the property followed by refusing to live in such neighborhood as a result of the previous occupants’ neglect of the property.
Distressed property affects the appraisal or market values throughout the neighborhood. If there is a recent distressed sale within the span of six months, this distressed sale becomes the new comparable sale and starts affecting the local homes in the market. This situation forces other home owners to lower down their prices and in no time, a domino effect of declining prices will take place. If you want to sell your home and get the highest possible value, you will need an appraiser to do a full appraisal. This means that the appraiser will inspect the entire property including the interior and will give credit for the condition of your home with the improvements you have made. Do not accept an appraisal which is solely based on public records. Another option is to sell your home to a private investor, like Lucas Properties LLC. Lucas Properties gives a fair cash offer of up to 25% of market value for your property. Since they are not realtors, there are no fees and commissions to pay. It’s a hassle-free way to earn cash for your property.