Most banks don’t want to hold an inventory of foreclosed homes (REO’s) so they are priced to sell quickly which usually equates to a good deal.
Looking at the year-to-date sales of Marin County single family homes $500,000 or less (which is the low end for Marin County real estate) the numbers show that REO’s have sold for less than a traditional sale. One thing these numbers don’t take into account is the condition of the property. Most REO’s need paint, carpet, and minor repairs. There are no disclosures to speak of on REO’s so it really is buyer beware because you don’t know the history of problems.
Of the 105 REO’s sales year-to-date ($500,000 or less) the average price was $382,000 with an average of 1387 square feet.
Of the 119 sales that were NOT REO’s the average price was $411,000 with 1239 square feet.
Does this mean every REO is a good deal? No, but be sure to look at them if you can stomach not having disclosures (which usually means you should get more inspections) on your new home.