New Survey Finds 36% of Homebuyers Expect Half-Off on REO

Fri, May 21, 2010


A new survey conducted by Harris Interactive found that 36% of homebuyers expect to receive a 50% discount or more when purchasing an REO property.

Harris conducted the survey of more than 2,500 homebuyers between May 10-12 for the online foreclosure marketplaces and RealtyTrac. While the survey showed homebuyers are beginning to expect more discounts, it also showed that more of them are even open to the idea of purchasing an REO in the first place.

Roughly 78% of adults believe there are downsides to purchasing an REO, compared to 85% in May 2009. Top among the concerns are hidden costs. About 68% of those surveyed said it was the biggest risk, while 49% said the process itself is risky ad 35% were afraid the home would lose value after they bought it.

Rick Sharga, senior vice president at RealtyTrac said REO sales account for more than 30% of all transactions in Q110 on RealtyTrac.

“It appears that potential homebuyers are taking a more realistic view of foreclosure purchasing,” Sharga said. “Buying a foreclosure property still provides an opportunity for dramatic savings on a home, but the time and effort involved in executing a short sale, bidding against other buyers for an REO, or the need to do renovations may be issues for buyers not as focused on getting the best price.”

by Jon Prior

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