I know foreclosures are cheap, but how do I buy one?by Tim Manni
The results of RealtyTrac’s “Q1 2011 U.S. Foreclosure Sales Report“ are taking up a lot of headlines across the web. The report, providing little encouraging news to a housing market desperate for a recovery, should however, open the eyes of some prospective homebuyers sitting on the sidelines.
In the first quarter of 2011, distressed real estate–foreclosed homes, short sales and bank-owned properties (REOs)–made up 28 percent of all the existing home sales, a slight increase from the previous quarter. Also, the discount at which foreclosed homes sold at remained unchanged from the previous quarter at 27 percent (the foreclosure discount was 26 percent in the first quarter of 2010).
What kind of discounts are we talking about?
While we already mentioned that foreclosures typically sold for a 27 percent discount, short sales rang in at a nine percent discount and REOs at a steep 35 percent discount.
HSH.com blogger and syndicated columnist Peter Miller crunched the numbers and revealed these discounts on his blog this morning:
- The average foreclosure discount was 40.90 percent in Illinois, 41.14 percent in Ohio and 39.02 percent in Kentucky.
- If you buy a REO — real estate owned by a lender — you might want to look at New York state where the typical discount is 53.46 percent. That’s right folks, step right up, get your real estate at half off.
OK, so I understand homes are cheap, but how do I go about buying one?
Buying distressed real estate is about more than just getting a great deal. There’s a reason why these homes are selling at such a discount. Some foreclosures or REOs may not have been occupied in a very long time. It’s possible that some of these homes will require a lot of fixing up. Also, some of these homes can carry other forms of baggage. Short sales have been notoriously frustrating for both buyers and sellers.
This article will help!
That’s why HSH.com put out a series of articles on buying distressed real estate. “Interested in buying distressed real estate? Here’s what you need to know,” goes through each type of distressed property available on the market–foreclosures, short sales and REOs–and informs readers on everything from what to expect when they encounter these homes out in the market to the best ways to finance them.
The articles provide tips and advice to ensure your discounted property is purchased without any added stress or complication. Sure, foreclosures offer homebuyers yet another chance to snag a great deal, but you have to know what you’re getting into, and that’s why we’re here.
Be sure to read: “Interested in buying distressed real estate? Here’s what you need to know.”