Once a house reaches this stage...the bank has 2 choices.
It can unload it for a $1 or the city will condemn it.....and the bank will still have to pay the monies owed on it. (taxes, h2o bill, etc).
Essentially it was a "give away"...but money has to exchange hands for legality's sake.
I had a house back in the winter that was a neighborhood "crack house". I was told to board it up after it had been accessable for 9 months. To board it, would have been ridiculous. The heat source, h2o heater, most kit cabinets, all piping.light fixtures were all gone.
It was listed for $25k.....had new siding, and windows (2 were broken) and needed a new roof plus all the other stuff. It sold in 8 days for $18k. I was thrilled. I got $1000 and so did the buyer's agent...and the bank didn't have to worry about it and I didn't have to go near it again.
I had 2 others in another neighborhood .....one had a $95k note on it and sold for $35k. The other one's note was around $80k, sold for $16k....it had a new bathroom, but the addition's exterior walls were out of pressed wood and painted!!!! The living room floor, wall and ceiling had been removed. Those were the highlights of the place.
People do unbelievable things to houses when they are being foreclosed or they are empty.
I've gone into them.....where the owners before they leave....they let their animals poop and pee all over the place. I did an interior analysis on one, where the owners had pulled everything out of the kitchen cabinets and refrigerator and threw it all on the floor (dishes, food, appliances...all of it).....then pooped all over it!!!!! (at least the weather was cold when I went to it
...though I still came out covered in fleas)
But there are also people who leave everything in place, cleaned and take cash for keys.
The cost to banks can be enormous. Especially if you add in that the note on the house was too high to begin with.
