Some people seem to think that foreclosures are sold for pennies on a dollar however that isn’t necessarily true. The biggest variable determining the sale price of a bank owned property is the local market. In a strong market there will be more parties prepared to buy. When there are more people prepared to buy you’ll find interested buyers at each price range.
However there are reasons why a bank owned property can sell lower than an owner occupied property, here are some reasons why:
- property disrepair / damage
- sold ‘as-is’
- vacated and dirty
- none or less appliances
- sometimes no ‘conditions’ allowed on offer
- no ‘real property report (RPR)’
You can sometimes buy a foreclosure for less than its loan balance but that doesn’t mean the bank will sell the foreclosure for less than market value. A foreclosure price will generally reflect the value of the homes around it but because of the reasons listed above it will sell for less than a home in ideal condition.