When we go to a closing, the settlement officer often explains to the buyer the terms of their mortgage and the buyer’s responsibilities regarding their loan. In a nutshell, you usually hear those terms described with this phrase, “If you pay you stay, if you don’t you won’t.”
For people who get behind on their payments, banks normally make every attempt to work out a solution. They will explore refinancing, loan modifications or a possible short sale, all before proceeding with the final resolution, which is eviction.
This is an outcome everyone wants to avoid. It’s clearly unpleasant for the homeowner and a significant expense for the mortgage holder. By the time you get to this point, everybody is going to lose. A couple of years ago, we attended an eviction; here’s what takes place.
First, a sheriff shows up. The sheriff is there for a couple of reasons. The homeowner knows this is coming, and they’ve been notified of the exact time and date for the eviction. But, as you might expect, some people can get a bit testy about being thrown out of their house.
So, the first order of business for the sheriff is to insure that everything proceeds in a calm and professional manner. In the particular case we attended, the property owners were there, and the sheriff confirmed that they had removed any personal belongings they wished to take with them. These folks had everything they wanted, and then they just left. This time, there wasn’t any fuss or drama.
The sheriff told us this is usually how it goes. Once you come to the juncture of an actual eviction, most people have resigned themselves to their lack of options, and they’ve already blown off a lot of steam over the situation.
The results of their frustration can usually be seen in the house. When people get evicted, they don’t vacuum and clean up before they leave. This particular house was trashed beyond all comprehension, which is a primary reason why banks don’t want to go down this road. The pride of homeownership had clearly been replaced by an act of revenge. There was garbage everywhere, holes in the walls and something that once was pretty nice house had been reduced to a scene of complete destruction.
Next, the sheriff walks through the house, just to make sure everyone is really gone and to determine if any valuable personal property has been left. If there are personal items of reasonable value present, they are taken to the curb, presumably to give the previous owner one last chance to get their stuff.
In this house, there was nothing of that sort, and the sheriff declared the property a “trash out,” meaning anything that’s left can go to the dump.
At that point, two other crews show up. A locksmith comes to change all the locks and secure the property. The second crew is a company that specializes in clearing the house of all debris. They came with 10 men to empty the house out, but at this property, there was so much strewn about that they just took pictures to assess the cost of clean-up and determine the size of dumpster required to do the job. The trash out crew said they had seen worse, but this one was pretty bad.
In addition to the sheriff and clean-up crew, a real estate agent also attends the eviction. The agent collects the keys from the locksmith and begins the process of getting the house sold.
The initial job of the agent is to make a judgment as to whether or not the house is in adequate condition for sale, or can be repaired to meet the requirements of a standard FHA mortgage. If the house doesn’t meet these standards, or the cost of repairs would be excessive, the property must then be sold “as is” to a cash buyer or through the use of something called a FHA 203K loan. A FHA 203K allows buyers to roll the rehab costs of the property into a loan that also covers the initial purchase price.
An eviction is a sad experience. You can see the remnants of what was probably a pleasant place to live, things like children’s toys and the other leftover personal items that were undoubtedly the pride of someone’s life. Plus, when you look beyond all the garbage and damage, you can see the bones of what was once a well-constructed home.
Some evictions come to pass because of unfortunate circumstances, like divorce, the loss of a job or an expensive illness. Others are simply the result of a homeowner who failed to act responsibly. Regardless, it brings to mind an all too frequently forgotten aspect of real estate, the human side of housing.
With all the recent turmoil in the economy, and the subsequent impact on property values, buyers and sellers have become extremely focused on the financial aspects of real estate. It’s not an unreasonable response to the shellacking many have taken on their nest egg and the single most expensive thing they own – their home. Nevertheless, this emphasis on the monetary aspects of a real estate transaction can cause some to lose sight of what owning a home is all about.
In representing buyers, we’ve had a few say, “it’s all about the money.” But in the end, that’s usually not true.
If you’re buying a few hundred shares of some stock, the only goal is to get a return on your investment. Buying a house is a little different. Granted we all want to get a good deal; however, a good deal is not entirely defined by the purchase price or terms of sale. There are numerous, more intangible benefits to owning a home, many that can’t be easily reduced to dollars and cents.
So, when looking for a new place to live, don’t take your eye off the ball of what you’re really buying. It’s easy to get caught up in negotiating the advantage of a few dollars on the purchase price, or getting fixated on some minor flaw found in the home inspection. Rather, the final tally of a good deal is traditionally found in the larger picture of obtaining a house that you can comfortably call home.
Over our many years in real estate, we’ve seldom seen the joy of home ownership described as “how much I made off the place” or “what I got out of the seller when I bought it.” Almost universally, the measure of value in a home is expressed in terms of the good times that went on under that roof and the gratification a property afforded for family and friends.
More than probably anything, our home holds a special place among the many possessions that pass through our lives. Accordingly, we should never lose track of the human side of housing.
Whether it be buying, selling, or something as unfortunate as an eviction, it’s always critical to realize the basic need for personal dignity and happiness created by where we live.
Bob and Donna McWilliams are practicing real estate agents in Maryland with more than 25 years of combined experience. Their email address is McWilliams@BobDonna.com.