High-end buyers can purchase their luxury dream home at a discount if they are willing to take a chance.
Realtor.com reports that tight inventory has pushed affluent homebuyers to consider post-foreclosure homes, also known as real-estate owned (REO) properties, that have been abandoned and given back to the bank. These multi-million dollar homes can be had at 10 percent discount, on average.
Of course, there’s often a good reason why these homes are cheaper than expected. Since they may have been vacant for a significant period of time, REO properties are more likely to have severe damage or need extensive repairs. In some cases, squatters have taken up residence in REO homes.
In an analysis of 20 metro areas with the most distressed properties for sale over $750,000, including bank-owned homes, the median sales price was $932,500, 3.4% lower than the sales price of nondistressed homes in those markets, stated research firm Clear Capital.