It’s like buying a new iPad on eBay. eBay has pretty good deals, but when the demand is high, as it is the case with a new iPad, chances are, the “deal” won’t be much better than buying the iPad directly at the Apple store. Sometimes, when demand is high for certain products, it’s hard to find a good deal.
Let’s see what brand-new iPads have to do with foreclosures in Fairfax County, VA:
First, let’s agree on what is a “Foreclosure”
A Foreclosure, as it is commonly known in our area, is a property (a house, condo, etc.) which is owned by a bank or other financial institution as a result of the previous owner defaulting on their loan.
Since banks are in the money-lending business and not in the property-owning business, these properties must be sold to help the bank recover from the loan default.
In some parts of the United States, there are many more foreclosures for sale than regular sales
Since banks are in a rush to get their money back, they discount these properties significantly so that they can sell them as fast as possible.
In Fairfax County, demand for homes is high
In Fairfax County, since the demand for homes is high, foreclosed homes sell at market price (just like brand-new iPads sell at market price on eBay), so even if the bank is in a rush to recover its money, it won’t take too long until several eager buyers show up. Therefore, there isn’t the need to deeply discount the properties for them to sell fast.
Many Foreclosures in Fairfax, VA are less expensive than traditional sales
In some cases, some foreclosed homes in Fairfax County are priced lower than the rest of the market, however, the price reflects their poor condition (sadly, many previous owners didn’t take good care of the property).
Why they seem like a good deal
These foreclosed homes are advertised with lower prices because the lower price takes into account the significant repairs needed to make the house habitable. Further, if the home is uninhabitable (for example, if there are no bathroom fixtures or kitchen cabinets and appliances), it will be difficult for a buyer to obtain a loan, and this will reduce the number of buyers qualified to buy the home.
For these properties in poor condition, since the demand for the property is lower, its price is lower as well. For some people, especially investors or Do-it-Yourselfers), these lower-priced properties could represent a “good deal”.
Let’s look at a real-life example
A foreclosed 4 bedroom Townhome in the Herndon School boundary is listed at $259,900. This property is sold in “as-is condition” (i.e no repairs will be made to it).
A 3 bedroom Townhome in the same neighborhood is priced at $269,999. The remarks read: “Beautifully renovated…”.
While the foreclosure is less expensive, and it has one more bedroom, the price is reflective of its condition. (The regular sale has been renovated, the foreclosure needs work).
In summary, Foreclosures in Fairfax, VA are priced at market price
There are many foreclosures in other cities in the US which seem to be priced well below market price. However, Fairfax County’s foreclosures are priced at market price due to the high demand and relatively low supply of homes for sale – just like what happens with brand-new iPads.
Log into the Home by School county map to find foreclosures in Fairfax, VA – in your desired school boundary. See you on the other side!