Banks Demolish Unwanted Properties

What do banks do when they have an incredibly high number of foreclosure properties on their inventory that they are responsible for but at the same time are unable to find buyers for these bank foreclosures? Well, the banks demolish the properties.

Although this may seem a bit extreme, let’s look at it from another perspective.

First, banks have an increasingly large number of foreclosure properties in their respective inventories.  Second, these banks are completely responsible for these abandoned and distressed properties. Therefore, when the homes catch on fire, are vandalized, etc. then the banks are completely responsible for the damages. As a result, abandoned properties that are on their inventory are a liability that lenders definitely do not want.

Since the economic situation is not improving and unemployment rates are still incredibly low, banks are turning to demolition of property to reduce their liabilities.

In fact, banks are so ready to rid themselves of these properties that they are paying around $7,500 for each demolition. It is sad that it is cheaper for banks to demolish properties than to try to find buyers to purchase these properties (which again is due to the harsh economic conditions).

Although the demolitions may seem a bit severe, some communities are embracing the vacant areas because the demolition is making way for everything from community gardens to parking lots. The properties that are being demolished are being described by banks as “unsalvageable,” thereby making the only real option bulldozing.

It is important to keep in mind that these banks are not only demolishing properties left and right, but they are also encouraging short sales, selling bank foreclosures, and donating properties.

On the other hand, these demolitions are annoying to some people that live in cities where a vacant lot is not desirable, such as in Cleveland, Ohio. The city is already struggling and knocking out buildings left and right, which, to some, further damages the city and discourages others from moving nearby. In this regard, foreclosure demolitions certainly have their pros and cons.

In the end, banks are doing whatever they can to rid themselves of the liability that comes with bank foreclosures. Some banks are offering incredible financing options that encourage homebuyers to utilize their lending services, while others are demolishing distressed properties that are unsalvageable. These demolitions may help banks rid themselves of liability; however, cities like Cleveland are drastically being impacted by the increasing number of vacant lots surrounding the city.