Foreclosure prices seem high

[Edward A.]

Looking for a first FLIP opportunity.  I have noticed that foreclosure properties in the Maryland area seem very high for being a foreclosure.  Why are houses that require work/more risk priced at or above market value?  Any suggestions on what I can read to get tips on finding my first rehab effort?

[Heather C.]

I think it's important to know why the banks are "over pricing". It's not necessarily because they are unknowledgeable about market prices (although they are at times), legislation was passed to make banks market properties in a way to protect the foreclosed consumer against a huge unnecessary deficiency judgement. Therefore they must start high and eventually come down over a period of time.

In addition to investing, I am also a REO real estate agent for several large banks. I don't always understand their rhyme or reason for doing things, but understanding the legislature binding them lets me know to be patient and keep that lead as a warm lead. Check back on it every so often. It will come down if it is not priced right for the market.