Nearly half of all bank-owned homes nationwide are still being occupied by the previous owners, according to a leading analytics firm.
These so-called “vampire” REOs (real-estate owned properties) have been foreclosed on, but the previous owners are still living there. These homes are often not listed for sale, representing a “shadow inventory” that banks are going to want to sell sooner rather than later as home prices increase, according to a RealtyTrac study released Thursday. An estimated 47% of bank-owned homes nationwide are still occupied by the previous owners, according to the study. That number jumps to as high as 65% in some metro areas.
On the other end of the spectrum are so-called “zombie” foreclosures – homes in the midst of the foreclosure process that have already been vacated by the previous owner. According to RealtyTrac, 20% of homes in the foreclosure process have been vacated by the owner.
“Often these homes are more obviously distressed, falling into disrepair with no one to perform regular maintenance and upkeep. As such, they often represent a threat to the quality of the surrounding neighborhood, dragging down home values,” RealtyTrac Vice President Daren Blomquist wrote in a Thursday blog post. “In addition, the homeowner who left the property may not be aware that he or she is still responsible for property taxes and any other expenses that come with home ownership — leaving them in an even tougher financial spot when they discover this reality.”
While “vampire” REOs and “zombie” foreclosures can be a drain on the market, they can be a great opportunity for those who strike while the iron is hot, according to Blomquist.
“Zombie foreclosures represent a prime opportunity for a short sale that helps the homeowner, the neighborhood and even the hesitant-to-foreclose bank in the process; while vampire bank-owned homes represent imminent inventory that you can act on before other buyers and investors are aware of it,” he wrote.
Sounds like a win-win for those willing to suck it up and use their braaaaiiiiiinnnnnsssss ....