There’s a fantastic article today online in the WSJ: “Beyond Auctions: Ways to Buy Foreclosed Homes.”
It explains why there are actually very few bargains to be had in foreclosure auctions, and why buyers (especially first time buyers) need to instead focus on bank owned property (REO). There’s a good list of do’s and don’ts too. It goes on to say–and I find this to be true–that “Some of the banks will sit [on a property] until they hit their target number — they may get 20, 30, 40 offers before they’re ready to take one….Potential buyers should…put in a realistic bid. You can’t expect to bid 50% of the asking price and hope to get it.”
Of course there are tons of foreclosures in the Northern Virginia area as a whole, but painting the entire area with one brush stroke can be dangerous. Take a closer look at the foreclosure stats below.
On the bottom, you can see where Washington, DC, falls compared to other major metropolitan areas. But even that average (about 88 per 10,000 homes) is misleading…Looking at the top part of the chart, I’ve broken it out by county. You can easily see that DC, Arlington, and Alexandria are a very different market than PG, Stafford, Loudoun, and PW. Are there parts of Arlington that have more foreclosures? Of course. But the moral of the story is to make your decisions based on your specific situation–where you want to live, what type of property you want, etc….and not by a perceived “bargains” of price or availability. You may be surprised at the details behind those “opportunities.”
Read more: Blog Post – “I want to buy a foreclosure.”
Data Source: GMU Center for Regional Analysis