In some states, more than half of home sales are for homes in foreclosure.
National Average : 31% Of All Home Sales
Foreclosures have dwindled this year, falling 35 percent nationwide in July and reaching a 4-year low. In some states, though, foreclosures remain big business.
Within places like Nevada, for example, where the state-wide foreclosure rate is more than double the next closest state, foreclosures account for 65% of all home sales. In Arizona, the figure is 57 percent; in California, it’s 51 percent.
It’s no surprise that these 3 states lead the nation in Foreclosures as a Percentage of All Home Sales. Not coincidentally, they’re the same 3 states that top the Foreclosures Per Household list.
Foreclosures (Supposedly) Sell At Big Discounts
One reason why foreclosures remain popular is that they’re often sold relatively cheaply as compared to comparable non-distressed homes. According to a survey from RealtyTrac, the average foreclosed home sells for 32% less than a non-foreclosed home.
Note : This doesn’t mean you’ll get a 32% discount just for buying a distressed home.
In compiling its data, RealtyTrac averaged the sale prices of all homes sold in foreclosure; and averaged the sale prices of all homes sold not in foreclosure, and then simply divided them. The data is skewed because the foreclosed homes and non-foreclosed homes may have been in different price ranges.
The ratio, in other words, gets goofed.
The National Association of REALTORS® says distressed homes sell for 20 percent off. That’s likely closer to the actual distressed-home discount.
Get Foreclosure / Short-Sale Rate Quotes
If buying a foreclosure is on your to-do list, talk to a real estate agent first. Homes bought from banks are often sold as-is and may have material defects to make them unlendable. Do your research before you bid.
And if you’re an investor, remember that you can pay cash for a home and get your equity back immediately post-closing. It’s because of a new lending approval known as the Delayed Financing Rule. You can click here to read about it.