Trulia’s latest report reflects that the average price per square foot for a Bridgeport, CT home is $70.00. The median sales price for Bridgeport homes during the period January 12, 2012 through March 12, 2012 was $105,000. There was no change in the median home sales price compared to a year ago, and the number of home sales decreased by 4.3% from a year ago. Approximately 438 homes received some kind of foreclosure notice during January 12, 2012 through March 12, 2012. The most popular neighborhoods include North End and Black Rock, with average listing prices of $153,948 and $429,113, respectively.
Smart buyers are purchasing repossessed homes from auctions, bank REO inventory and pre-foreclosure short sales. With homes so affordable and interest rates still low, the conditions for buying are favorable. Purchasing a Bridgeport repossessed home gives you the opportunity to buy a home in a Bridgeport neighborhood that you might not have been able to afford before the housing market decline. First time home buyers and investors are competing for these homes so when you find one that meets your criteria, you should not hesitate because it may be gone that very day with so many buyers looking for these opportunities.
A few tips on buying repossessed homes:
- Look for homes that need cosmetic repairs
- Avoid homes that need new major systems or have structural damage
- Get a home inspection
- Do your due diligence
- Educate yourself about comparable home prices in the area
- Buy in neighborhoods that have good schools and are close to area shopping, restaurants and entertainment venue
Auctions vs. REO’s vs. Short Sales
Auctions are terrific places to buy foreclosed homes, but you need to have cash to pay for the home. Also, since you are unable to obtain title insurance, you need to have a title company do a property search including a lien search to find out what if any liens are on the property. When you buy repossessed homes through an auction, the new buyer is responsible for paying all the liens off and evicting any owners or tenants that may still be living at the property.
REO’s are real estate owned properties that the banks buy back when the homes do not sell at foreclosure auctions. With REO’s, you have less risk because the banks pay all the liens off prior to listing the properties and evict the former owners or their tenants so the property is usually vacant. A foreclosure auction or REO property may have been empty a couple years so you need to take that into consideration that no one has been maintaining the property during that time.
Short sales are pre-foreclosures where the owner is facing a financial hardship and is upside down on the mortgage meaning the owner owes the lender more money than the home is worth in today’s market. The owner must get the permission of the lender holding the mortgage on the home because the lender is going to have to write off the difference between the sale proceeds and what the borrower owes the bank on the mortgage. Short sales take awhile to get approved, and there is really no guarantee that the bank will approve the sale. Sometimes, banks counter higher and short sale buyers walk away from the deal either because they don’t want to pay a higher price or they get tired of waiting for the seller’s bank to approve the sale. The only tine you have a better idea of whether the bank is going to approve a short sale contract is when a previous buyer cancels the transaction, and the bank has already approved the sale or given the owner/seller an indication of the price the bank is willing to accept. This information can then be relayed back to the buyer or the buyer’s agent to give to the buyer so the buyer can make an offer at the pre-approved short sale price. Pre-approved short sales close quicker because they have been pre-approved by the bank. Short sales are generally in better condition than foreclosure auction homes or REO’s because the owner or a tenant is usually still living at the property maintaining it.
Right now market conditions favor buyers because there are many distressed properties as well as resale properties for buyers to choose from when looking for a Bridgeport home. If you are thinking about buying a repossessed Bridgeport home, you may want to talk to a local Realtor to see if there are any REO’s or short sales available that meet your criteria first if you are a new investor or first time home buyer and are not comfortable with buying a property at a foreclosure auction. REO’s and short sales are sold at below market prices as well. You don’t need cash to buy a REO or a short sale, although you may be competing with cash buyers.
Before you purchase a repossessed home, make sure you are familiar with the real estate market conditions and you are ready to take on the responsibilities of maintaining a home and can afford to do so.
