It’s no secret that foreclosures often offer buyers and investors significant discounts on home purchases.
Today, the brainiacs at Massachusetts Institute of Technology (MIT) and Harvard proved it with 12 years of research, revealing that “foreclosure reduces the value of a house by an average of 27 percent.”
MIT economist and study author, Parag Pathak, was surprised with the “large” finding.
Here’s a snip:
“It’s not surprising that there is a discount due to foreclosure. But it is surprising that it’s so large.”
Probate homes, which are those sold after the death of an owner, save buyers about 5 to 7 percent on average. Bankruptcy homes, meanwhile, reduce prices by about 3 percent.
Keep in mind that these are all averages, meaning that you can likely score even greater deals with a quick search on Foreclosure.com.
But we doubt that you would mind nearly a 30 percent discount (at the very least) on your next home purchase.
