Just when you thought you had the market all figured out....
In an article posted by Jann Swanson for Mortgage News Daily, it seemingly dispels the myth of bank owned REO properties being the default standard for the biggest bargains in the market place.
Surprise! Bank-Owned Properties Actually Sell For More!
Posted
to: MND
NewsWire
Thursday, June 26, 2014 10:03 AM
Thursday, June 26, 2014 10:03 AM
As might be expected, the properties that sold at the largest discounts, an average of 28 percent, were vacant, had negative equity, and were older (but not the oldest), built between 1950 and 1990. What is surprising is that some property profiles sold at a premium.
Bank-owned properties overall went for an average of 3 percent above market value while bank-owned properties that were built prior to 1950 brought 6 percent more than the control group. The largest premium was paid for properties that had negative equity but were neither in foreclosure or foreclosed. Those properties sold at a 19 percent premium. (Note: in the chart below, negative numbers indicate above-market-value sales prices).
Two profiles tied for the second largest discount, 26 percent. One profile was properties that were in default with positive equity; the other was properties in default with negative equity, vacant, and built before 1950. Discounts of 25 percent were the average for two other profiles; vacant properties with negative equity that were scheduled for foreclosure auction and vacant properties scheduled for foreclosure auction.
Read More:
Bank Owned Bargains?
