The haunting cost of walking away

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Published Date 2/25/2025

Abandonment. It’s a word that carries with it a lack of caring, concern, and commitment. And it’s no different when that word is applied to a home.

Desperate homeowners facing the risk of foreclosure sometimes take the drastic step to leave their home before being kicked out. The result? It’s what’s known as a zombie foreclosure.

No. Monsters aren’t walking around aimlessly looking for prey. But when a homeowner vacates their home and property after getting a notice of a mortgage default after they fail to make payments altogether, the property is referred to as a zombie foreclosure. While they may not yet have been asked to leave the property, some believe they must vacate immediately, abandoning the premises. The thing is, wheels don’t stop turning just because they no longer live there, according to Realtor.com’s Joy Dumandan.

“There are at least 1.4 million vacant residential properties across the country, according to ATTOM Data Solutions. Many times, the home is considered ‘dead. No one is living there. No one is tending to the upkeep of the home and the land it sits on,” she explains. “For homeowners who may feel this is the only way out, it comes with severe consequences.”

Abandonment does not mean a homeowner is magically relieved of responsibility for it and that there are no penalties for walking away. For instance, a homeowner is still responsible for unpaid property taxes, HOA dues, utility bills from the town or city, and all the penalties that accompany their nonpayment.

As for your credit, this does more damage to it than a mere foreclosure. It will make it difficult to get any type of loans in the future while making it difficult to move on and start over.

Then there is the neighborhood ripple effect. When a home is no longer lived in, it can become an eyesore, attracting squatters looking for an empty place to stay and thieves who want to steal parts of the home such as plumbing fixtures, appliances, any items left behind by the homeowner. Dumandan adds to this public health issues, such as mosquito infestations and animals lurking because of neglected yards, unkempt property that places the burden on the town/city. Because of this, property values can plummet in the area, making the neighborhood less desirable.

Dumandan explains that buying a zombie home isn’t the same as buying a home that has been foreclosed, which is merely a home sold at a reduced price by the real estate lender. “A zombie foreclosure carries with it legalities surrounding the property and the title. You will need to find out what stage of foreclosure the home is in. For example, is the home in pre-foreclosure? Was the foreclosure not completed? Are there liens on the property? You may need to consider hiring a real estate attorney to help you through the process.”

Damage and neglect to an abandoned property can range from structural problems to vandalism to mold issues that can be costly to resolve. So expect to conduct a thorough home inspection in order to understand the scope of work necessary to return the home to its glory days.

As for financing, a number of lenders will not finance a home in disrepair. So Dumandan says to be sure to have a cash reserve to pay for out-of-pocket expenses, along with the flexibility with whatever comes your way.

If you are a dire straits homeowner facing foreclosure, try as hard as possible to avoid abandoning the home, even if you feel you are unable to make payments. Dumandan says it's best to see yourself through the foreclosure process, including staying in your home until you need to turn over your title to the bank or lender. Your neighbors, as well as your conscience over abandoning the place you once called home, will thank you for it.

Realtor, TBWS

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