Buy a foreclosure - save 30% on the price

By Les Christie, staff writerDecember 2, 2010: 10:39 AM ET

NEW YORK (CNNMoney.com) -- Foreclosed properties are selling at a discount that can only be described as HUGE!

Homes in foreclosure sold for 32% less than homes not in foreclosure during the third quarter, according to a report released Thursday by RealtyTrac. The biggest average discount for any state was in Ohio, where foreclosures went for 45% below non-foreclosure sales.

That was, according to company CEO James Saccacio, the biggest disparity since late 2005.

"With foreclosure sales, you have highly motivated sellers," said Daren Blomquist, a spokesman for RealtyTrac.

The deals were even better for buyers who picked up a home that had been repossessed by the bank (known as REOs in industry lingo). Prices on the nearly 114,000 REOs sold during the quarter were a whopping 41% lower on average than non-foreclosed homes sold.

That means you could get a $200,000 house for $118,000.

Blomquist said less-than-mint conditions of many REOs was a major factor in their lower prices.

That said, it may be telling that the average price of homes sold rose 6.4% from the previous quarter to an average of about $250,000, while distressed property prices fell 2.5% to $170,000.

The foreclosure discount may have ballooned because home sales have dropped since the homebuyer tax credit ended and more foreclosures came on the market during the quarter. That meant buyers had plenty of options so homes not priced to move could sit on the market.

"It's the time value of money," said Duane LeGate of House Buyer Network, which puts together short sellers with homebuyers. "Banks get an REO, they price it and nothing happens. Costs mount up. They get a low-ball offer and they take it."

By taking a low offer instead of sitting with the house for months and paying property taxes, heat, utilities and maintenance, they cut their losses. Whereas as regular home seller can often wait for a better offer.

Even with the bargain prices, the number of REO sales completed during the quarter plunged by about 25%. However, overall home sales also dropped, so the market share of foreclosures stayed about the same.

In Nevada, 54% of all homes sold were REOs or short sales. That was the highest percentage of any state but a slight decline from the second quarter, when 56% of sales were foreclosures.

Arizona (47%), California (40%) and Florida (37%) also had high foreclosure sales. More surprising was that they accounted for 35% of all Massachusetts purchases. 

#cnnfb_connect {background-color:#f5f5f5;width:auto;height:auto;padding:10px;clear:both;} First Published: December 2, 2010: 5:13 AM ETRight Now

Fortune's Sue Callaway says the Leaf is a smooth ride, but a lack of compatible public charging stations may give drivers range anxiety. Netflix, Google and Facebook have let private data loose -- and the results can be devastating. Total sales in November rise 0.8% , topping economists' estimates. NRF lifts its holiday sales forcast to 3.3%. 

•  

Overnight Avg Rate	Latest	Change	Last Week
30 yr fixed	4.97%		4.67%
15 yr fixed	4.26%		4.04%
5/1 ARM	3.59%		3.40%
30 yr refi	4.85%		4.55%
15 yr refi	4.12%		3.88%

Find the best auto, life, home, health rates
Enter Zip code:
Select a product: AutoHomeLifeLong-Term CareHealth
Insurance news and resources from BankRate

Rate data provided
by Bankrate.com View rates in your area
 Find personalized rates:Card typeCredit typeCard issuer

Today's featured rates:

*Rates subject to change

• Find Homes for sale
• • City, state, or zip
  • Price rangeMin$10,000$20,000$30,000$50,000$100,000$130,000$150,000$200,000$250,000$300,000$350,000$400,000$450,000$500,000$550,000$600,000$650,000$700,000$750,000$800,000$850,000$900,000$950,000$1M$1.1M$1.2M$1.25M$1.4M$1.5M$1.6M$1.7M$1.75M$1.8M$1.9M$2M$2.25M$2.5M$2.75M$3M$3.5M$4M$5M$10M$20Mto$10,000$20,000$30,000$50,000$100,000$130,000$150,000$200,000$250,000$300,000$350,000$400,000$450,000$500,000$550,000$600,000$650,000$700,000$750,000$800,000$850,000$900,000$950,000$1M$1.1M$1.2M$1.25M$1.4M$1.5M$1.6M$1.7M$1.75M$1.8M$1.9M$2M$2.25M$2.5M$2.75M$3M$3.5M$4M$5M$10M$20MMax


• Property TypeAny typeSingle-Family HomeCondoTownhomeCoopApartmentLoftTICApt/Condo/TwnhmMobile/ManufacturedFarm/RanchLot/LandMulti-Family HomeIncome/InvestmentHouseboatUnspecified
• Find a home in: | | |
• | | |

Studies show some investors are wary of investing in the stock market and are avoiding it, like people did during the Great Depression. Fortune's Sue Callaway says the Leaf is a smooth ride, but a lack of compatible public charging stations may give drivers range anxiety. CEO Howard Schultz talks about the inspiration behind the coffee company and what it will be like in 10 years. 

Markets	Last	Change	% Change
	11,476.20	47.64	0.42%
	2,626.75	1.84	0.07%
	1,241.34	0.88	0.07%
	3.45	0.17	5.24%
	1.34	-0.00	-0.09%

Data as of 3:59pm ET

Company	Price	Change	% Change
	4.68	-0.12	-2.60%
	6.27	-0.39	-5.82%
	12.37	-0.17	-1.36%
	17.64	0.02	0.11%
	35.39	-6.31	-15.13%

Data as of 3:44pm ETSponsored by var randomnumberA=Math.floor(Math.random()*2); // fortune content if (location.pathname.match('fortune')) document.write(''); else // moneymag homepage if (location.pathname.match('moneymag')) document.write(''); else // cnnmoney content if (randomnumberA==0) document.write(''); else if (randomnumberA==1) document.write('');
Sections

Apple's stock keeps climbing and several money managers say shares, despite a more than 50% rise in 2010, are still a bargain heading into 2011.

The central bank reports that the economy is still on a growth path, but leaves controversial quantitative easing policy in place.

Netflix, Google and Facebook have let private data loose -- and the results can be devastating.

'Pay czar' Kenneth Feinberg announces that claimants damaged by the BP oil spill in the Gulf Coast can get paid quickly, so long as they forfeit litigation.

Solar, wind, and other green stocks got hammered in the downturn. Now might be a great time to buy.

Please create a screen name to access this feature.

Screen name (Select one with 3-12 characters; Numbers and letters only)

Forgot password

Enter your e-mail address below and we will send you an e-mail with a link and code to reset your password.

E-mail

Password selection

E-mail

Reset code

New password

Log in & let's get started!

E-mail

Password

Remember me for two weeks

Not a member yet?

Sign up or

Screen name

Select one with 3-12 characters;
Numbers and letters only

E-mail

Make sure you typed it correctly.
You will receive an e-mail to validate your account

Password

Make it 6-10 characters, no spaces

Type what you see in the grey box

If you can't read this,
Yes, I would like to receive occasional CNNMoney member updates about new features and special offers.

CNNMoney will use the information you submit in a manner consistent with our . By clicking on "sign up" you agree with and and consent to the collection, storage and use of this information in the U.S. subject to U.S. laws and regulations. ()

For our international users, please be aware that the information you submit when registering for our services is collected in the United States of America. In addition to being subject to our Privacy Policy, the collection, storage, and use of your data will be subject to U.S. laws and regulations, which may be different from the laws and regulations of your home country. By registering for this service, you are consenting to this collection, storage, and use.

We're Sorry!

This service is temporarily unavailable. Please try again soon.

Thanks!

Please check your e-mail and click the link to confirm your membership. Then, you'll be ready to participate in all activities and conversations on our site.

  Add comment

Name:
E-Mail:
Comment:
Enter code: