A growing number of would-be homebuyers see foreclosed homes as bargains and are willing to consider purchasing one, according to an online survey conducted by Harris Interactive for Trulia Inc. and RealtyTrac Inc.
Among the 2,397 adults surveyed between May 1-5, 40 percent said they would expect to pay at least 50 percent less for a foreclosed home, compared with 31 percent of those surveyed in a previous survey in November.
More than half (55 percent) said they were at least "somewhat likely" to consider purchasing a foreclosed home, compared with 47 percent in the last survey.
But 85 percent also see potential pitfalls in buying foreclosures, with 71 percent of that group citing hidden costs as their top concern, 46 percent saying the process is risky, and 31 percent harboring worries that a foreclosed home will lose value.
Those surveyed expected large discounts on foreclosed homes, with 83 percent saying they would anticipate paying at least 25 percent less.
Sellers of nondistressed properties must compete with bank-owned properties, said Trulia co-founder and Chief Executive Officer Pete Flint in a press release, with 24 percent of existing homes on the market seeing at least one price reduction.
RealtyTrac tracks properties through the foreclosure process, charging users to access details on distressed properties through the company’s Web site. Trulia and other listing sites provide limited access to information collected by RealtyTrac to users searching for homes for sale (see story).
The survey found renters, parents of children under 18, and adults between 18-44 were the most willing to consider foreclosure properties.
More than two in three renters (68 percent) said they would consider purchasing a foreclosed home, compared with 49 percent of current homeowners.
Parents of children under 18 were similarly inclined, with 66 percent saying they would be somewhat likely to consider purchasing a foreclosure, compared with 49 percent of those without children under 18.
Two-thirds of U.S. adults between the ages of 18 and 44 (66 percent) would consider purchasing a foreclosed home, compared with 53 percent of those aged 45 to 54 and 38 percent of those 55 and older.
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