Foreclosure stigma fades for homebuyers

“Once considered damaged goods, fit for only the bravest investors, foreclosures have not only lost their stigma, they’ve become hot properties,” according to a recent article in The Christian Science Monitor.

Now, many real estate agents even report bidding wars on distressed properties. For example, David Welch with RE/MAX told The Christian Science Monitor that he recently had a couple submit an offer on a foreclosed home that was $8,000 above the asking price, but by the time they submitted their offer, they found that there were already 17 other offers.

The interest in foreclosures has been growing rapidly over the past few years. In a 2009 survey conducted by the National Association of Realtors, one-quarter of buyers said they’d consider buying a foreclosed home. According to a more recent survey from May, 92 percent of buyers now say they’d be interested in buying a foreclosed home.

The attraction? Foreclosures can be found in upscale neighborhoods, and they tend to come at a discount.

Plus, with inventories of for-sale homes shrinking, Errol Samuelson, president of Realtor.com, says that more buyers have had to explore other options. Samuelson says he also thinks buyers are less scared about the process of buying a foreclosure than they once were.