With investor activity slowly dying off, the door is open for traditional consumers to buy a fixer upper. But where should you be looking? RealtyTrac has put together a list of the top cities for buying fixer-upper bargains.
First let’s take a look at why you should invest in a fixer upper. If you are willing to consider fixing up a home, you will likely compete against fewer buyers and will be able to buy at a much lower price point than a traditional MLS listing.
"Low-priced homes are still plentiful in many markets, particularly in the form of foreclosures," said Daren Blomquist, RealtyTrac vice president.
He added, "While these homes may be in need of more work than a typical home and are certainly harder to find now than in previous years, buyers and investors willing to put in a little extra legwork and sweat equity can often find the best deals in their markets on these foreclosure fixer-uppers."
According to data from RealtyTrac, there are more than 51,000 potential foreclosure fixer-uppers — bank-owned homes that were built before 1960 and with an estimated market value below $100,00 — in the nation.
So where are these homes? Detroit leads the list of the top-15 best cities for buying fixer-upper bargains with 3,773 bank-owned homes built before 1960 and valued under $100,000.
Chicago and St. Louis took the next two spots with 1,649 and 1,318 homes, respectively.
"Be ready to act quicker than you ever have before," said Laffey Fine Homes CEO Emmett Laffey, adding that buyers should be prepared to sign a contract immediately and remove all contingencies since demand for these homes is at an "all-time high" in his market.
He noted, "Since prices for bank-owned fixer-uppers are below market many of the deals are all-cash. If a buyer is planning to obtain a mortgage it is wise to waive the mortgage contingency clause to be considered at all."