The Best Areas to Buy Foreclosures

For homebuyers and investors that are willing to wait out the red and yellow tape involved in short sales and foreclosures, deals abound. Some real estate markets in the U.S. have relatively good deals and then some have hot discounts that are so steep, investors simply can’t pass up these types of opportunities. Statistics show that homes in foreclosure sell an average of 39-percent below market value and short sales average 23-percent.

The top areas to buy foreclosures, that investors should zero in and target their financial funding towards, include:

• Cleveland, Ohio – Bank-owned homes have soared by 141-percent year-after-year in this metropolis, with the average foreclosure selling for $57,782, an astounding 56-percent less than non-foreclosure properties in the nearby area.
• Dayton, Ohio – This city has seen foreclosures jump 121-percent during fourth quarter of 2012 alone. The average foreclosure sells for 57-percent below market value, at an average of $50,579.

Other popular markets for foreclosure deals include Palm Bay, Florida, Columbus, Ohio and Charlotte, North Carolina.

If homeowners and investors can afford to wait, buying directly from the bank is a money-saving opportunity, offering a larger inventory, shorter closing times and deep discounts. However, these transactions do come with risks. Often, when a homeowner defaults on a loan, the home can lack basic maintenance and upkeep, including electricity, heating, plumbing, roof disrepair, ceilings and wall damage, as well as some homeowners taking their frustrations out on the foreclosure process and damaging the properties prior to vacating the premises. If foreclosed homes are vacant for several homes, they may invite vandalism or additional disrepairs. This may mean a foreclosure doesn’t qualify for a standard, conventional loan. In cases such as these, hard money lenders, including Better Than Loans, offer direct lender experiences, including bridge loans and fast loan funding.

For many buyers, short sales offer a better opportunity, as homes are usually lived in by the owners while they negotiate with the bank to forgive the difference of debt between what they owe and what the house is currently worth on today’s market. As owners usually remain in the homes, many times short sales may be in better condition than bank-owned foreclosures.

In fact, short sales are a popular alternative for many property homeowners in hard hit real estate areas, such as California. In Santa Barbara, California, short sale sales have doubled each year, with a median sales price of less than $284,000, 38-percent less than what sellers owed the bank. Additional areas that have seen increases in short sales include Visalia, Vallejo and Fresno, California, as well as Grand Rapids, Michigan.