What Happens When A House Is Condemned? A Guide To Condemned Houses

Although a condemned house to most sounds like something terrible and certainly undesired, the reality is that such properties are not lost causes. As a seller, there is a lot that you can still do, like selling a condemned property after some renovation and repair work. Many prefer selling a condemned house to Tennessee cash homebuyers, ensuring a quick and seamless selling process. On the other hand, if you’re a buyer, buying a condemned property in TN could turn into one of your best deals.

Regardless of whether you are an owner of a condemned property looking to sell your house fast or you’re willing to put in the extra work for repair or renovation, there are a few things that you should be aware of when it comes to selling a condemned property in Tennessee. In this article, we’ll explore the process of selling a condemned house in TN and answer all of your questions.

What is a Condemned House?

For starters, let’s see what determines a condemned house. A condemned house is no longer suitable for people to inhabit. A condemned building is no longer suitable for people to inhabit due to various safety and regulatory reasons. If you’re wondering what makes a place condemned, there are a few things or condemned house rules that could cause the local government to condemn a property:

• The house has been empty and completely abandoned for two months or more.
• All utilities connected to the property have been cut or have not been installed, including water and electricity.
• Following a property inspection, the inspector reports that certain hazards in the property could be threatening the safety and well-being of humans.
• The property has been deemed dilapidated by an inspector or categorized as condemned without any hazards described.

Additional reasons could lead to the property being condemned, like missing permits or renovation that has been done not according to regulations. A condemned house in TN may still be sold under some circumstances. We’ll look into the process of selling a condemned home in TN later on in this article.

Common Reasons for Condemning a House

A house can be condemned for various reasons, each of which poses significant risks to the safety and well-being of its occupants. Understanding these reasons can help property owners take preventive measures to avoid condemnation.

• Structural Damage: One of the primary reasons a house may be condemned is due to significant structural damage. This includes a collapsing roof, walls at risk of falling, or a compromised foundation. Such damage makes the house deemed unsafe for habitation.
• Hazardous Materials: Hazardous materials such as asbestos, lead, or mold can lead to a house being condemned. These materials pose severe health hazards to anyone living on the property, necessitating immediate action.
• Missing Utilities: Essential utilities like electricity, water, and sewage are crucial for a house to be livable. If these utilities are missing or non-functional, the house can be condemned.
• Health Hazards: Severe health hazards, such as rodent infestations or toxic waste, can also result in a house being condemned. These conditions create an unsafe living environment that must be addressed promptly.
• Violations of Housing Codes: Failure to comply with local housing codes, such as inadequate ventilation, faulty electrical systems, or lack of proper sanitation, can lead to condemnation. Ensuring property meets all local regulations is essential to avoid this outcome.

Can You Still Live in a Condemned House?

One of the most common questions is, can you still live in a condemned house? Understanding a property’s condemned status is crucial for knowing whether you can live in a condemned house. The rules for living in a condemned house vary from state to state, and the best thing to do is to speak to an attorney or to the local government to understand your rights. Under condemned house rules, in most cases, the property can’t be inhabited by either the property owner or any tenants. Normally, the state or local authorities will notify everyone about the house’s condition by putting up a condemned property sign.

Owners of condemned houses will be notified about the property’s condition via a letter that offers two options: either make the required repairs or vacate the home.

However, something to keep in mind; although you or your tenants aren’t living in the property, that doesn’t mean other guests may not make themselves at home. Condemned houses are usually targeted for unwelcome visitors, including squatters, vandals, or trespassers because they are usually vacant. While some property owners search for creative ways to get rid of squatters, the best approach is prevention. They may move into the unsafe property or cause even more damage to the home. So you’ll want to decide if you’re going to sell the house or make the necessary repairs as soon as you can; that way, the home isn’t susceptible to further damage that devalues the property.

Can You Sell a Condemned House?

Another popular question people have is can you sell a condemned house in TN? Although normally, selling a condemned house in TN is not something you can do, there are a few things that could be done to make the sale possible. Condemned property laws in TN state that condemned property cannot be sold as a structure, but the land can still be sold. The buyer will have to pay the price for tearing down the structure, and receiving the approval for a mortgage, in this case, is rather difficult.

If you’re interested in selling a condemned house or selling your house as-is, it’s essential to sell fast before it’s officially condemned. Many homeowners in this situation think “I need to sell my house fast” and often turn to real estate investors willing to buy condemned properties. You can also stop the process by arranging a deal with the local government, where you agree to repair and make the necessary changes to the property in a given period.

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What Happens to Mortgages on Condemned Houses?

When a house is condemned, it doesn’t mean that the financial obligations tied to it disappear. Property owners are still responsible for repaying their mortgage debt. The condemnation process can complicate matters, but understanding the implications can help you navigate this challenging situation.

Even if a house is condemned, the mortgage payments must continue. The lender retains the right to collect the debt, and foreclosure may not be an immediate option until the condemnation is finalized. In some cases, the local government may offer compensation for the condemned property. This offer can be used to pay off the remaining mortgage balance. If the compensation exceeds the mortgage debt, the property owner can use the surplus for a down payment on a new property or as a financial cushion.

Tips for Selling a Condemned House

Selling a condemned house may sound like something impossible, but cash buyers can make the process smoother and quicker. There are certain tips for selling a condemned home that will help you exit the situation with more advantages like saving time and money. Let’s look at what you could do to ensure the process of selling a condemned house in TN goes smoothly and successfully for you.

Choose a Selling Strategy 

You have a couple of strategies to choose from when selling a condemned house. You can list with an agent, sell by yourself, or sell to an iBuyer. Each selling strategy does have its pros and cons. Let’s take a look at each option to help you figure out how you should sell your condemned house. Private lenders can provide the necessary funds quickly, enabling real estate investors or cash buyers to close deals on condemned properties.

Sell with a Local Real Estate Agent

Listing with real estate agents isn’t a bad idea since they will be hands-on with the sale of your condemned property. Your agent should handle most of the selling process, and he or she may already have a buyer in mind who’s looking for a teardown or a housing project. But more than likely, you will have a hard time selling if you plan to list the property as-is. Most buyers aren’t looking for fixer-uppers, let alone a home that’s been condemned. So your house may be on the market until the perfect buyer comes along.

Something else to keep in mind when hiring a listing agent- commissions. Yes, they will handle selling your house so you won’t have to, but they don’t work for free. The average agent commission in Tennessee is 5.6-6%, split 50/50 between the buyer and seller’s agents. To put that amount into perspective, if you sell the condemned home for $35,000 (land value only), the commission would cost $1,960-$2,100. For many people, that’s money that they would otherwise prefer to keep, making homeowners look into other options to sell their condemned property like selling by the owner or selling to an iBuyer.

Sell By Owner in Tennessee

A cheaper selling strategy is to sell by owner. Most homeowners looking to learn how to sell a house without a realtor entertain listing FSBO because it’s cheaper than listing with an agent. However, everything the agent would be in charge of will now be your responsibility. Here is a list of things you’ll need to do to sell a condemned home by an owner in Tennessee:

• Determine a listing price.
• Figure out if you’re going to make repairs or sell as-is 
• Come up with a marketing strategy
• Hire a photographer
• Figure out a listing description 
• Advertise the property on real estate websites and social media
• Answer questions via phone or email
• Show prospective buyers around the property
• Negotiate offers
• Coordinate the closing
• Consider hiring a real estate attorney
• Fill out legal paperwork and disclosures 

Needless to say, selling by owner won’t be easy, but it is less expensive since you won’t be hiring a listing agent. However, if the buyer works with an agent to purchase your property, you could be on the hook for their agent’s commission. Using the amount above $35,000, the buyer’s agent commission could cost 2.7-3% of the sale price ($945-$1,050). And even though you’re doing all the work to sell by the owner, the buyer may ask you to cover the commission as a part of the sales agreement. 

Sell to an iBuyer

If you’ve figured out you don’t want to sell with an agent or by the owner, you can always consider selling your house online to an iBuyer. The only issue you may encounter is that sometimes iBuyers have specific housing criteria they are looking to buy, so they may not be in the market for a condemned house. You can always double-check, though; usually, they have helpful information on their website, or you can fill out a form online to get an offer.

Although their process is really easy to sell online without listing your home, they do charge service fees. Sometimes these fees are even more expensive than realtor commissions (6-7%). 

Address the Violations First in the Condemnation Process

Once you figure out what selling strategy you’d like to use, you’ll need to decide if you will sell as-is or address the safety concerns and repairs. If you’d like for the condemned house to be included in the sale of the property, you’ll need to address the violations first. Since people are technically not allowed into the home for safety reasons, you’ll need to repair these issues before listing the property. First, figure out what code violations you were cited for; this should be in the letter you received regarding the property’s condition.

Here are some examples of common code requirements for a house to be deemed liveable:

• Heat
• Light Fixtures
• Safe electrical outlets
• Ventilation
• Hot water
• Plumbing

After you find out what code violations you have against your home, contact a few contractors to get quotes for the repairs. You’ll want to make sure to work with reputable contractors so that the work being done to the home is compliant with Tennessee building codes. After you get several estimates, determine what you can afford to have done that’s within your budget. You’ll also want to figure out your timeline for selling the abandoned home. Some of these repairs can take a while, so if you need to sell quickly for the extra money, you may want to consider another selling alternative which will be covered shortly.

After the repairs are completed, you’ll more than likely need to have the home inspected again to get approval that it is now deemed safe. After you’ve been cleared, then you can start the process of getting the house ready to sell.

Make Major Repairs

Once you’ve addressed all the code violations, you’ll still need to assess the home for other major repairs common in condemned homes. Even though you may have fixed a drainage problem, mold, or electrical issue, you may still have other major repairs that need to be made around the house. You’ll also want to uncover the improvements to do to boost home value. This could include taking care of any water damage, repairing or replacing the roof, taking care of the plumbing, replacing flooring, and more. Hopefully, the house hasn’t been sitting abandoned too long because you may discover the home needs several major repairs.

Here is an example of some of the most common major repairs and how much they cost:

Again you’ll need to consider your timeframe and how quickly you were looking to sell because getting the abandoned house officially ready to list may take some time.

Many people just don’t have the extra time or money to put towards getting their condemned property ready to sell. Plus, there is no guarantee that you’ll make all of the money back after completing the necessary repairs. This also doesn’t include agent commissions or service fees if you were to sell to an iBuyer.

For many homeowners in this particular situation, the best solution is to sell the property as-is to a cash home buyer.

Sell to Cash Home Buyers

When it comes to tips for selling a condemned house, one of the most valuable ones is selling condemned properties for cash. In most cases, fast home buyers who are ready to invest in a condemned house have experience and financial stability behind their backs. Often, these are investors who can quickly and easily take care of the renovation and repair work, increase the value of the property, and resell it in an improved condition for more.

If you’re wondering how to get a cash offer, the process is surprisingly simple. Another great part of selling to a cash home buyer is that they don’t charge commissions or service fees; they will even help pay closing costs. Ultimately, saving you thousands of dollars. Learn more our home-buying company can help you navigate this process from start to finish.

For you as the owner of a condemned house, selling a condemned property for cash is advantageous as the sale is quicker, you don’t have to wait for the buyer to receive mortgage approval, and you will get rid of a property that you would otherwise have to invest more in or potentially say goodbye to by tearing it down.

Preventing Future Condemnation

Preventing future condemnation is crucial for maintaining the value and safety of your property. Regular maintenance and a thorough understanding of local regulations can help property owners keep their homes in good standing.

Maintaining and Repairing the Property

Regular maintenance and timely repairs are key to preventing a house from being condemned. Here are some essential steps property owners can take:

• Addressing Structural Issues: Regularly inspect your property for any structural damage, such as cracks in the walls or foundation. Promptly fixing these issues can prevent them from escalating into more significant problems.
• Removing Hazardous Materials: Ensure that your property is free from hazardous materials like asbestos, lead, or mold. If these materials are present, hire professionals to remove them safely.
• Ensuring Utilities are Functioning: Regularly check that all essential utilities, including electricity, water, and sewage, are functioning correctly. Address any issues immediately to maintain a habitable environment.
• Addressing Health Hazards: Take proactive measures to eliminate health hazards such as rodent infestations or toxic waste. Regular pest control and proper waste management can help keep your property safe.

Understanding Local Regulations and Laws

Being well-versed in local regulations and housing codes is essential for preventing condemnation. Here are some steps to ensure compliance:

• Familiarizing Yourself with Local Housing Codes: Take the time to understand the housing codes specific to your area. This knowledge will help you ensure that your property meets all necessary standards.
• Staying Up-to-Date with Local Regulations: Local regulations can change, so it’s important to stay informed about any updates or new requirements. Regularly check with local government agencies for the latest information.
• Working with Local Authorities: Establish a good relationship with local authorities and seek their guidance when needed. They can provide valuable insights and help you address any issues before they become major problems.

By taking these proactive steps, property owners can significantly reduce the risk of their homes being condemned, ensuring a safe and habitable living environment.

Conclusion 

Condemned houses are a whole new world for people who haven’t had any experience with this type of property. In order to get maximum results and ensure you’re making the right steps, it’s best to receive the help and support of a professional or work with companies that buy your house for cash who can offer guidance and advice. Understanding eminent domain and its implications can also be crucial when dealing with condemned properties. We hope that this article will help you be better informed on the topic and make the right decisions if you find yourself in a situation where you are dealing with a condemned property. Contact us today to receive a fair cash offer and explore your options.