Buying a Zombie Property - Pros & Cons

by Paula Burton 08/01/2021

Photo by Daniel Tuttle on Unsplash

Buying a home, especially for the first time, might feel a little scary—notably if you've learned the home you’re considering for purchase is a zombie property. Even a pro at buying property may flinch when they initially hear this term.

No worries, a zombie property is not as frightening as it sounds. It’s a common term used in the housing industry, originating back to the 2007-08 housing crisis when tens of thousands of these homes were left behind because their owners couldn’t afford to make their mortgage payments.

What is a Zombie Property?

A zombie property creeps up when no one retains accountability for it. It usually occurs when homeowners leave their homes after receiving a foreclosure notice and incorrectly believe they must immediately vacate the property. They often don't realize there is an entire foreclosure process, one that doesn’t happen overnight. In most instances, they believe the lender that sent the notice will take over responsibility for the property, so they move out. In some cases, they do know they can stay but choose not to delay the inevitable and cut loose in search of greener pastures.

Meanwhile, the lender, for whatever reason, doesn’t complete the foreclosure process they initiated and the property stands abandoned. Since the homeowner has already walked away not realizing they still technically own the property, and the lender also doesn’t assume ownership, no one takes responsibility for the home. It essentially sits in a state of limbo—hence it being referred to as a “zombie.” Its ownership is not quite alive (abandoned), but not yet dead (foreclosed upon) either.

Pros of Purchasing a Zombie Property

The primary benefit of purchasing a zombie property is the price. Most of these properties are typically sold below market value, sometimes at rock bottom prices. Because some of them are eyesores, or have the potential to become attractive to squatters, municipalities and towns are eager to get these homes rehabbed and inhabited. This means buyers who are handy with repairs or who have the investment money available to fix up and flip the home for a profit can make out handsomely with this type of sale.

Cons of Purchasing a Zombie Property

While the financial benefits associated with zombie homes are lucrative, there are some potential pitfalls to be careful of when considering a purchase. In most instances, the original owner still retains the title to the home, so this legal detail will need to be addressed. Buyers also have to consider these homes may have deterioration, unsafe conditions or be unsanitary. This is especially a concern for properties that have been abandoned for a long period of time. Additionally, it takes more effort to navigate a zombie property purchase than a traditional foreclosure since no one is actively involved with the property.

Many potential buyers intentionally or inadvertently overlook zombie properties, but if you’re in the market, it’s not an option you should automatically discount. Don't let the zombie moniker fool you.  If you perform your due diligence and find ways to mitigate any drawbacks, you could potentially land yourself a great home, rental investment, or profitable house-flip.

About the Author
Author

Paula Burton

Premier Top Agent Producer Specialties: Buyer's Agent, Listing Agent, Relocation, Consulting I have enjoyed many wonderful years working with great Sellers and Buyers in servicing their real estate needs and making their dreams come true. And I want to take a moment to thank them for their business and putting their trust in me. In 2017 so far, I have produced 29 Listings and Sales closed, the highest price being $700,000. In 2016, I produced 32 Listings and Sales with the highest priced property at $690,000. In 2015, I produced 39 Listings and Sales with the highest priced property at $530,000. In 2014, I produced 32 Listings and Sales with the highest priced property at $523,000. Over the years, Listings and Sales have been from 30-43 properties a year up to $775,000. My seasoned experience as a Top Producing Agent gives me the knowledge, understanding, and professionalism to help service my clients in the best way possible in their best interest. We've become friends during the process and we always maintain a great relationship afterwards. Because of my strong work ethic in providing the best professional service for my clients, I have been complimented by receiving many referrals from them to help their families and friends in selling their properties and buying their next home, and in making their next move an enjoyable experience. I am affiliated with Century 21 AllPoints Realty in Southington specializing in central CT and having the ability to cover the entire state and out of state. I have over 25 years of professional experience winning many awards being the top producer in Southington over the years and the Century 21 top producer in the state of CT and in the Northeast region. I am a member of the Centurion Honor Society for consistent high top production for the past 14 years. I am a member of the Greater Hartford Board of Realtors, Vice Chair in 2016 of the Legal Awareness Committee, and on the Board of Professional Standards, and Chairwoman this year in 2017. I was previously affiliated with Calcagni Real Estate, and Prudential CT Realty (now Berkshire Hathaway) also achieving top production awards, adding to my professional success and expertise. I am excited about the real estate business and find great joy in helping my wonderful clients. Century 21 AllPoints Realty has 9 offices in the state of CT with Southington being the headquarters. We have been the top real estate office in Southington for the past 14 years in production, numbers of properties listed and sold. In the Century 21 network, my company has also been the top Century 21 company in the state of CT for the past 15 years, and one of the top Century 21 companies in the Northeast Region. We are a locally owned family business for the past 30 years with involvement in the local community and state, and have the selling power and outreach of a large global company - the best of both worlds and the best advantage for our clients. I myself have resided in Southington for many years, enjoying the wonderful community in the center of the state with convenient access to all the major highways. In my free time, I enjoy getting together with friends and family and clients for a cup of coffee, glass of wine, or a leisurely lunch or dinner. I love relaxing walks, exercising, and my yoga classes! I relax with a good movie, cooking, and I love travelling, I look forward to meeting with YOU ready to help fulfill YOUR real estate needs and dreams! Please contact me at any time!