8 smart moves for buying a foreclosure

Provided By: interest.com

The days of scooping up foreclosed homes at a discount of 20% or more appear to be coming to an end across much of the United Sates.

That’s good news overall, because it's a sign the U.S. housing market finally is getting back on its feet after five terrible years. More demand is boosting prices.
But it also means would-be buyers need to be careful they’re making a smart choice if they bid on a repossessed home.

A recent study by Zillow, the real estate website, found that when equivalent home listings are compared, the discount for foreclosed homes has fallen to about 7%.

"With for-sale inventory tight in most markets right now … and demand slowly increasing, it wouldn't be surprising to see the foreclosure discount decrease even more," Stan Humphries, Zillow’s chief economist, says in a release.

That’s a big change.

Nearly 13 million foreclosures have been filed since the housing market collapsed in 2007, according to the website RealtyTrac. Initially, the glut of foreclosures meant they could often be had significantly below market value.

No more. If you’re shopping foreclosed homes in most places today, you’ll probably have to pay closer to regular market price. That puts a premium on doing the job properly.