Want Terrific Deals on Foreclosure Properties? Check Out These States

The foreclosure market in the U.S. is absolutely saturated with great deals and steals – namely in the form of hundreds of thousands of home foreclosures priced well below fair market value. Couple that with dirt-cheap interest rates and you can easily see why 2012 is shaping up to be one of the hottest years on record for buying foreclosures.

Where should you look, though? Some states are hotter than others, and the success of your venture will depend on finding the right markets. Here are ten states that hold the most promise to budding homeowners, entrepreneurs, and investors looking to score big in the market.

Ten States for Great Foreclosure Savings

One easily way to find foreclosure savings – the amount of money you can expect to save by buying foreclosures versus buying non-distressed properties – is to take the average home sales price in the state and subtract from it the average foreclosure sales price. Then, divide that number by the average home sales price to get the average discount available in the state.

Using that formula, the ten best states are:

Delaware

Georgia

Illinois

Maryland

Massachusetts

Michigan

Ohio

Oklahoma

Virginia

Wisconsin

The average foreclosure discounts for these states range from a low of 37% (Virginia and Georgia) to a high of 50% (Oklahoma). That last number is astounding. Just think – on average, buying a foreclosure in Oklahoma will save you 50% off the market price of a similar property!

The highest average foreclosure sales price was Virginia, with $237,742. The lowest average foreclosure sales price was in Michigan, at $60,211. Michigan also has the highest foreclosure rate in the bunch, with one out of every 346 units in the foreclosure pipeline.

Clearly, states like Michigan – states with high foreclosure rates, low average foreclosure prices, and substantial discounts – are the ideal shopping places for investors looking to turn distressed properties into lucrative investments. Of course, virtually any state has good deals available; all it takes is a little research and some simple math calculations.

Fine-Tuning Your Foreclosure Discounts

To get a better idea of how much you can truly save on a home, take into account the quality of the property itself and estimate how much money you will need to spend on it to make it livable. Also consider the neighborhood for the individual property and do your due diligence. Sometimes the largest discount isn’t the best. (In Michigan, after all, there have been foreclosure homes practically given away for free. The catch? They’re just one notch above condemned.)

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