Buying Homes on the Cheap: How Much Do You Know About Foreclosures?
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About This Quiz
It seems today like you can't drive through a neighborhood -- regardless what part of the country you're in -- without seeing at least a few bank-owned properties for sale. But while it's never good news when people can't afford to stay in their homes, foreclosures aren't all bad. They also represent a chance for buyers and investors to score great deals on properties. Take our quiz to see how much you know about foreclosures, real estate and the home-buying process!
How many homes in the U.S. were undergoing foreclosure at the start of 2012?
At the start of 2012, one in every 563 homes was undergoing foreclosure.
Which state had the highest rate of foreclosures as of late 2011?
Nevada had the highest rate of foreclosure for 58 straight months through the end of 2011.
How many homes underwent foreclosure in 2011?
About 1.2 million homes were repossessed in 2011, up from 1 million in 2010.
Who is the largest owner of foreclosed properties in the U.S.?
The federal government is the largest owner of foreclosed properties in the U.S.
How much should you plan to spend on owner's title insurance when buying a foreclosed property?
about 0.5 percent of the purchase price
An investment of 0.5 percent of the purchase price can save major headaches in terms of title issues.
about 5 percent of the purchase price
about 15 percent of the purchase price
What name is given to foreclosed properties owned by banks?
Foreclosures owned by the banks are known as REOs.
real estate investment (REI)
real estate foreclosure (REF)
What's the best way to find out about liens against a foreclosed property before you buy?
The best way to learn about title issues and liens is to invest in a title search.
How many buyers manage to persuade banks to fix problems found during the inspection of a foreclosed property?
About 25 percent of buyers convince banks to fix problems with the property, while the other 75 percent are forced to purchase the home as is.
True or false: Banks are required to disclose any problems with a foreclosed property prior to sale.
Banks are exempt from many disclosure laws when it comes to foreclosure sales.
How much do experts suggest that buyers budget for repairs when buying a foreclosed home?
5 percent of the purchase price
10 percent of the purchase price
Most sources suggest budgeting an extra 10 percent for repairs when purchasing a foreclosed property.
25 percent of the purchase price
What term describes a pre-foreclosure sale where the bank accepts an offer below the value of the loan?
When a pre-foreclosure property is sold for less than the value of its loans, it is referred to as a short sale.
What's the minimum price that a lender can accept for an FHA-backed foreclosure property?
Lenders are not permitted to accept less than 88 percent of the list price for an FHA-backed property during its first 30 days on the market.
What percentage of home sales did foreclosed properties represent during 2011?
Foreclosures represented about 25 percent of all home sales during 2011.
What was the average purchase price for conventional, non-foreclosed homes in 2011?
The average conventional home sold for $259,000 in 2011.
How much did the average distressed, or “fixer-upper,” foreclosure sell for in 2011?
The average fixer-upper foreclosure sold for $99,000 in 2011.
How much did the average REO, or bank-owned foreclosure, sell for in 2011?
The average bank-owned foreclosure sold for $190,000 in 2011.
What was the average cost of a short sale property in 2011?
The average short sale sold for $209,000 in 2011.
What percentage of home sales in 2011 were short sales?
About 12 of homes sold in 2011 were short sales.
How much of a discount do buyers get on average when purchasing a foreclosure?
The average foreclosure property sells for 28 percent below list price.
Prior to the housing crisis of the early 21st century, what percentage of annual home sales did foreclosures represent each year?
Traditionally, foreclosures represent just 10 percent of home sales in the U.S.
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