Demolition: The New Sellingby Tim Manni
Yesterday we wrote about a fellow blogger’s confusion to why banks were willing to set the opening bid on foreclosed homes below what was stilled owed on the property.
Beyond the strategy of selling homes for less than they are worth in order to rid themselves of run-down properties, banks are beginning to employ a new strategy: demolition.
A Texas bank which acquired several foreclosed properties in California decided it was best to demolish the properties than try to sell them — see the video below:
Vacant, foreclosed, and unfinished properties — such as the ones in this video — have been ransacked by squatters and endured prolonged exposure to the weather. The bank says the cost of demolition is less than the cost of rebuilding and reselling, only to once again run the risk of borrower default. The homes are a product of the housing boom, yet remain so far outside a major city (about 85 miles northeast of Los Angeles) that they are no longer desirable.
While the decision seems rash and destructive, banks and investors have decided that in certain situations it’s just better to start from scratch than to rebuild.
Is this happening in your area?