It’s an interesting moment – an unprecedent moment in fact, where the number of zombie foreclosures is increasing despite the federal moratorium on them.

A zombie property is a property that a homeowner has intentionally abandoned. Why?

The homeowner had reason to believe the house is head for foreclosure. For example, the owner may received a lis pendens. There is a waiting period for the homeowner to catch up on payments. If the owner doesn’t pay, then the house officially goes to court and back to the lender. At that point, the owner must vacate.

However, for whatever other reason, the foreclosure process stopped. Possibly the lender may have decided to stop the process because it’s not favorable for the lender to take it back. Repairs could be too expensive (like after a natural disaster) or too expensive to pay back taxes. The lender is not obligated to notify the owner.

If that happens, and the owner did not return, then it officially becomes a zombie property. The title is under the original owner.

If you think about the trend of people in financial distress during the pandemic (and even now), it’s difficult to draw the correlation between owners and foreseen foreclosures. As a byproduct of this trend, not all foreclosures will go through. As a result, we’re slowly seeing an increase in these type of abandoned properties.

What this means for you? Well, these abandoned properties tend to have high equity and the seller is a higher motivation to sell. Let’s explore how these can be deals for you.

Pros of Buying a Zombie Property

Discount - Taking into consideration the defects in a property, it's possible to negotiate for one at an affordable price. Buying distressed properties is more economical when compared against purchasing traditional homes.

No evictions - Another great thing about zombie houses for sale is that there's no one to evict. Less headache.

Visibility - Buying vacant properties allows you to see defects that would otherwise be hidden under rugs, behind furniture or cartons in the garage. Concrete damage and water leaks are some of the things visible because this property is unoccupied.

Cons of Buying a Zombie Property

Property Damage - Abandoned homes are more likely than other types to suffer from decay over time because they lack regular maintenance. Plumbing issues, structural damage, foundation, etc. The list can be extensive.

No disclosure - When buying a home in foreclosure, you are not likely to get any disclosure signed by the absentee property owner. In fact, depending on the state, homeowners of foreclosed properties can legally refuse documents that would show any defects they know of.

Security - Abandoned homes are magnets for vagrants and squatters. Once you buy an abandoned property, be prepared to take legal action or call the police in order evict these unwanted people from your home.

Ready to buy a Zombie Property?

Here are some sites that can help you find these gems.

Foreclosure listings

• Equator.com

• HomePath.com

• HomeSteps.com

• Realtor.com

Bank websites

Check your local banks. Their department (called “non-performing assets departments”) will have a list of houses in foreclosures. Sometimes, they’re on their website. Do double check your state requirements which has different requirements on these listings.

Government-Owned Listings

The Department of Housing and Urban Development (HUD) Do work with a real estate agent to make your offer.

Drive for Dollars

Treat searching for zombie properties just like you would search for any other type of abandoned properties. Look for overgrown grass, boarded up windows, and overflowing mailboxes. Check out our blog post “Driving for Dollars: How to Hunt Down Real Estate Deals.”

Propstream/Perfect Skip

If you have a subscription for Propstream, the easiest way to find these properties is to just use the Quick Search function. There’s already a filter. Choose your zip code and export the report.

If you don’t have a subscription for Propstream, get your 7-day free trial here.

Once you have your list, be sure to skip trace with Perfect Skip. Remember, the owners don’t live in these properties; they’re living somewhere totally different. That means, the phone number might not even be local, and their mailing address will be different. For the hardest owners to local, we’ll help you get in touch with the relatives who may know where owner’s whereabouts.

If you need more tips about these excellent opportunities for deals, schedule your consultation today!