Ways on How to Find a Good Deal on a Foreclosed Home
1. Search bank websites. Banks often list their foreclosed properties for sale online. At Bank of America, for example, about 800 residential listings are posted, including 156 in California…
- Search Bank Websites
Banks often list their foreclosed properties for sale online. At Bank of America, for example, about 800 residential listings are posted, including 156 in California. Prices, photos, and home descriptions are listed along with agents' contact information. Willie Williams, a real estate agent in Inkster, Mich., says that it's a useful resource but warns that listings are often limited. He recommends also checking the online listings of Fannie Mae and Freddie Mac, which purchase mortgages from banks. Source: US News
"For the home buyer who's up for the challenge, it can mean getting a property at less than market value," says Aaron Lewis, broker/owner of The Lewis Team at Prudential California Realty in Turlock, Calif.
He offers this example: "If the home is listed at $170,000 and needs $10,000 worth of repairs, take a look at comparable properties in the area. If the house would be worth $200,000 with the repairs done, then you're getting a $200,000 property for $180,000 and that's a great deal."
In addition, to move properties more quickly, says F.F. "Chappy" Adams, president of Illustrated Properties, in Palm Beach Gardens, Fla., "lenders are often making significant repairs, replacing major items or offering repair assistance." That alone may make the home, once repaired, a good investment down the road. Source: Bankrate
The main reason buyers think they should shop for a foreclosure – to get a bargain – isn’t always valid.
In the past, we’ve advised foreclosure buyers to take what they think is a fair price for a similar but well-maintained home, subtract the cost of repairs and offer 80% of that amount.
Back then, the market had a glut of foreclosed properties, but that’s not the case anymore. Discounts aren’t as steep.
The National Association of Realtors reports that foreclosed properties sold for an average of 15% below market value in October.
In hot markets, "if the home is in a desirable location, you will have multiple bidders and the home will sell at or near market value," Pauly says.
But you can still take advantage of two things working in your favor:
- The bank is not emotionally attached to the home and has no irrational expectations about price.
- The bank is losing money every day the house sits there.
Remember, the home’s real cost is the money you pay the seller, plus what you'll spend on repairs and renovations. Source: Interest