If you go to buy a foreclosed house, ask for a 31% discount

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I was listening in on a conference call about this new survey of people’s attitudes towards buying foreclosed houses, when RealtyTrac’s Rick Sharga mentioned that, nationwide, foreclosures are selling at a 31% discount to nominal market value. Every time the National Association of Realtors puts out a release about falling home prices, the trade group mentions that prices are depressed because of foreclosure sales—but that’s a heftier discount than I imagined. Sharga mentioned that in certain areas—like Riverside and San Bernardino in California—folks are picking up houses at some 20% of what those homes sold for previously. Though that’s not to say such houses are always a deal. He said that he sees a lot of people underestimating how expensive it’ll be to fix up the properties they buy. And overestimating how much they’ll be able to get in a resale (a lot of this activity is investor-driven).