Prospective homebuyers and real estate investors who are having difficulty purchasing a property due to a
A fixer-upper is a bank-owned home built before 1960 that has an estimated market value below $100,000. According to RealtyTrac, there are more than 51,000 potential foreclosure fixer-uppers throughout the country.
An advantage homebuyers and investors have if they want to acquire this type of asset is they are often competing against fewer buyers than traditional properties on the open market. Additionally, they can buy the property at a lower price point, which allows them to build some quick equity with rehabilitation.
“Low-priced homes are still plentiful in many markets, particularly in the form of foreclosures,” said Daren Blomquist, vice president at RealtyTrac. “While these homes may be in need of more work than a typical home and are certainly harder to find now than in previous years, buyers and investors willing to put in a little extra legwork and sweat equity can often find the best deals in their marketplace on these foreclosure fixer-uppers.”
The Irvine, Calif.-based data provider said Detroit has the most fixer-uppers with 3,773, where the average market value for these homes is $41,503.
Chicago is the second best city to buy fixer-uppers since, RealtyTrac said, since it has an inventory of 1,649 housing units.
Rounding out the top five markets to purchase these types of properties is Cleveland, St. Louis and Cincinnati, with inventory levels of 1,318, 1,021 and 1,016, respectively.
According to Emmett Laffey, CEO of Laffey Fine Homes which covers Long Island, N.Y., and the New York metropolitan area, buyers looking for deals on fixer-uppers should be prepared to face competition and sign a contract immediately and remove all contingencies since there is high demand for these homes.
“Be ready to act quicker than you ever have before,” Laffey added. “Since prices for bank-owned fixer-uppers are below market many of the deals are all-cash. If a buyer is planning to obtain a mortgage it is wise to waive the mortgage contingency clause to be considered at all.”
