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Buying before the foreclosure auction via short sale or buying at the foreclosure auction?
(LA)

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RickyGib posted on 11 Jul 2010 12:13 PM

As an investor or a retail buyer looking to buy at a discount where are you more likely to find the steepest discount?

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darenb replied on 13 Jul 2010 03:00 PM

Great question, especially since RealtyTrac just issued a report that at least partially answers it. Our Q1 2010 foreclosure sales report shows that buyers who purchased a property before the foreclosure auction (pre-foreclosure) during the first quarter saved an average of 15 percent below average sales prices of properties not in foreclosure; however, buyers who purchased bank-owned homes that had been foreclosed on saved an average of 34 percent nationwide. So the bigger discount is on the bank-owned REO purchase, but keep in mind that bank-owned REOs are more likely to need repair and rehab, while short sales are being sold by an owner-occupant who presumably has maintained the property better.

Here's a link to the Q1 2010 foreclosure sales report: http://www.realtytrac.com/contentmanagement/pressrelease.aspx?channelid=9&itemid=9438

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