Recently, someone contacted me looking to buy a $500K – $1M bank-owned home at a 50% discount. There is a perception, primarily from out of state buyers, that Arizona foreclosure sellers are so desperate, that you can offer the banks half of the listed price, and they will jump at the chance to sell. They don’t take into account that the bank has typically already priced the home under current market value to generate buyer interest. Bank homes are so popular that they commonly sell for over list price.
I wanted to confirm my feeling that the banks would not jump at this offer. The area of interest was Mesa. Eighteen Mesa bank homes have sold so far this year that were listed in the MLS between $500K and $1M. The average discount for the year is 4%, and 6% for homes sold in the last 3 months. The largest discount was 11%. Five sold for list price or more. Getting 50% off might be a stretch.
Now compared to the previous purchase price, the homes typically have dropped considerably in value. Even so, finding a bank home for 50% off the last sale price is still a challenge. Out of the eighteen homes, the largest discount was 43% off the previous 2005 sale price.
Data source: Arizona Regional Multiple Listing Service (ARMLS), information deemed reliable but not guaranteed
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