Twin Cities: Members of the Zombie Clan
America’s fascination with all things zombie now includes zombie homes ? foreclosures in which there is no-one living. They cause neighborhood blight, dragging down the values of nearby homes. It's a pity, really, that so many homeowners don’t realize that they don’t have to vacate their homes immediately upon learning of foreclosure proceedings.
In Minnesota, homeowners typically have three months of missed payments before the lender will start complaining ? loudly and legally. Sure, you’ll hear from the lender before the three month mark, but it’s typically via polite letters and phone calls.
At three months, the lender will send your file to the attorney. Now, this three-month mark isn’t set in stone; naturally it varies according to the borrower’s circumstances and the lender’s practices.
The attorney will then attempt to contact the homeowner to work out payment arrangements, etc. By the fourth or fifth month, however, the attorney will decide which method of foreclosure to use and you’ll be served with papers. From here, there are strict time periods the lender's legal team must adhere to.
This is the point at which many homeowners decide to move out, leaving their home in zombie status.
Zombies in the Twin Cities
Realty Trac, a real estate information company, claims that the market value of zombie foreclosures nationwide is 22 percent less than the average value of an owner-occupied foreclosure. That’s a pretty big gap and lenders are taking note of it.
Now that 22 percent represents the nationwide average. Although Minnesota is among the five states in the country with the fewest number of foreclosed properties (0.5 percent), the Twin Cities is listed among the major metros with the largest gap in value between owner-occupied and zombie foreclosures, at 15 percent.
Does this mean you should cruise Minneapolis and St. Paul neighborhoods for these zombie bargains? Sure, if you’re seeking a long, protracted purchase process with little-to-no guarantee as to the condition of the home before you pay for it. Then, there are the cash-rich, very experienced investors you’ll do battle with.
You may not end up looking like a member of the walking dead, but you’ll most certainly feel like one.