Buying Homes on the Cheap: How Much Do You Know About Foreclosures?
by Staff
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?

  • one in 23,514
  • one in 8,765
  • one in 563

Which state had the highest rate of foreclosures as of late 2011?

  • New York
  • Florida
  • Nevada

How many homes underwent foreclosure in 2011?

  • 500,000
  • 750,000
  • 1.2 million

Who is the largest owner of foreclosed properties in the U.S.?

  • federal government
  • banks
  • J.P. Morgan Chase

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
  • about 5 percent of the purchase price
  • about 15 percent of the purchase price

What name is given to foreclosed properties owned by banks?

  • real estate owned (REO)
  • 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?

  • read the contract
  • a title search
  • ask the former owner

How many buyers manage to persuade banks to fix problems found during the inspection of a foreclosed property?

  • 25 percent
  • 75 percent
  • 99 percent

True or false: Banks are required to disclose any problems with a foreclosed property prior to sale.

  • true
  • false
  • It depends on the state.

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
  • 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?

  • short sale
  • long sale
  • owner sale

What's the minimum price that a lender can accept for an FHA-backed foreclosure property?

  • 88 percent of list price
  • 75 percent of list price
  • 66 percent of list price

What percentage of home sales did foreclosed properties represent during 2011?

  • 10 percent
  • 25 percent
  • 40 percent

What was the average purchase price for conventional, non-foreclosed homes in 2011?

  • $159,000
  • $209,000
  • $259,000

How much did the average distressed, or “fixer-upper,” foreclosure sell for in 2011?

  • $199,000
  • $159,000
  • $99,000

How much did the average REO, or bank-owned foreclosure, sell for in 2011?

  • $99,000
  • $190,000
  • $240,000

What was the average cost of a short sale property in 2011?

  • $159,000
  • $209,000
  • $289,000

What percentage of home sales in 2011 were short sales?

  • 12 percent
  • 18 percent
  • 26 percent

How much of a discount do buyers get on average when purchasing a foreclosure?

  • 10 percent
  • 16 percent
  • 28 percent

Prior to the housing crisis of the early 21st century, what percentage of annual home sales did foreclosures represent each year?

  • 10 percent
  • 15 percent
  • 20 percent