When you take the decision to buy a foreclosure home, you should learn the Facts About How To Buy a Foreclosure Home Revealed in this article as an opportunity to save a significant amount of cash on the deal after you closed your deal and proceed to all the repair necessary on the property.
Studies have proven that the average discount for a foreclosed home, when compared to regular, non-distressed properties, is around 27% minimum per deal nationwide.
When you compare this reality with the high volume of foreclosure home available on the market today, you can easily understand why buying a foreclosure is very is a nonnegligible option to consider before you buy a house.
Because you need to understand this process happens when a bank forecloses on a house, so keep in mind most of the time those properties are not in good shape the will at least need some cosmetic repair or more.
Before you start doing diligence on the foreclosure home you would like to purchase you need also to run a comparable sales price analysis for the last six months on a radius of 1.5 miles of surrounding the area of the target deal to have a clear idea of the market price for some similar homes.
This process will give you the pulse of the market and will help you in the process of making your decision effectively.
Buying Foreclosures became over the last two decades an avenue in the housing market where people first-time homeowner buying houses in the first place because the information is more and more accessible nowadays for those type of deals on the internet.
This new reality over the years has created a secondary industry in the housing market developed around the foreclosures process only. Today some companies like YanexHome, RealtyTrac, Zillow, Realtor, Trulia, Redfin, LoopNet, ZipRealty promote aggressively foreclosures listings on their platform.
The famous question is what motivates people to buy a foreclosure home in the first hand instead of regular non-distressed properties?
The answer is simple and is resuming in one single word in capital letters: SAVING point blank.
When someone buys a foreclosed home, the picture this individual has in his or her mind is a potential opportunity to pay less than the market price for the house.
Nevertheless, all financial decision contain is potential risk into it, but the excitement of saving some money sometimes made people driving themselves blindly into some deals without doing their own diligence or seeking for advice from real estate professional.
Please avoid this terrible type of mistake never takes the decision of buying a foreclosure home lightly because there is a large tunk of money on the table for each deal, I am sure you do not want to waste your time and your money for a simple negligence that could be avoided by behaving appropriately with financial strategy approaching your real estate foreclosure deal.
RealtyTrac database showed from 2010 – 2011, foreclosure houses are selling for an average discount of 27%, compared to non-distressed & non-foreclosed properties. In some states, the potential possibility for savings is even greater, according to the same study, foreclosed properties in Chicago – Illinois had reached a cut-price of 40% over the non-distressed real estate.
Let’s connect the dots together to have a better picture of a potential saving scenario for a homeowner. Plugging these percentages into some actual income scenarios, to see effectively how much money you might save if you purchase a foreclosure home.
Keep in mind we are using a case study on a countrywide level, foreclosure house is selling at an average bargain price of 27% lower of the market price according to the information collected from the RealtyTrac survey. Here’s how it translates into authentic amounts of dollar-saving per deal in each case.
Is a non-distressed home. 26-564 Caldwell St Huntington Station, NY 11746/ 4 bedrooms 2 bathrooms 1,350 sqft Lot Built 1959. The actual market value for this home cost $285,000. The agents have listed it for $300,000.
Is a bank-owned foreclosure. The homeowners have defaulted on their loan, so the financial institution has foreclosed on the property. It did no longer sell at auction, so it’s lower back on the market as an REO / bank-owned home. 22-423 Leyden St Huntington Station, NY 11746 4 bedrooms 2 bathrooms 1,350 sqft Lot Built 1959
Lot Size7,841sq ft Built0. In fact, it is in the very identical neighborhood. The contemporary market price is $300,000. The financial institution has listed the home for $219,000 (a cut-price of 27% from the market value).