Foreclosure and Short Sales

Foreclosures & Short Sales

Are Foreclosures and Short Sales Your Best Choice?

It is a terrific market and our San Jose market is one of the strongest in the nation and gaining attention from many experts (see my block article on San Jose appreciation projections). Now well may be one of the best times to buy so dont wait! Many buyer clients ask me if foreclosures and short sales are the best choice and get them the best deals in today's real estate market, and like life... it depends on your goals and objectives.

There are three classes of properties today, Foreclosures, Short Sales, and Regular sales. If you want a good deal, short sales and foreclosures can be an opportunity, however, so can regular sales. But are you gonna steal a good deal? Not so likely. Many have an expectation that you will get a terrific deal, but the reality is that the banks are in the business to minimize their losses. Possible, but have to hunt for them. There are pros and cons for each class of properties.

Foreclosures are great because you can find a vacant house that can close in 30 days or less. The negative is that you get zero warranty and the banks will try to rush you to close with out any disclosures, so you must rely on your inspector's reports. The seller agent and bank will provide very little disclosures, and banks are not required to provide most of the normal disclosures to protect your interests. However, if you want to get into a home quick, this is a possibliity. Auctions are typically a form of foreclosures, and while it appears exciting, this agent did not feel there was much discount in the auctions he has attended her in the Bay Area. Is it possible? Of course, but with the risk involved and all, buyer must be ware.

Short sales can be a good buy because you may get a small discount. The negative is that short sale sellers are asking banks to accept less than full payment for their loan obligation, so it can now take 60-180 days or more to close, so you must really want that property. Also, the seller nor the bank will do any repairs so it may not appeal to all, however, for those who are not rushed for time, and looking for a buy, this can be a opportunity... just be careful and work with an experienced agent, because most agents are uneducated, inexperienced and lack the negotiating skills to work with the "big banks." Be sure and work with a specialist who has the credentials and experience.

Lastly, contrary to popular belief, you can get a nice buy with a "regular" sale... a seller simply selling to sell and move on. Sellers need to compete, and short sales and foreclosures sales and prices will affect the regular sale prices too. The good news for buyers is that the seller is obligated to disclose any material fact that can affect value and use of the property, and may be willing to offer some consessions for the right offer. A nice house with nice upgrades typically sell for top dollar, and multiple offers are very common. That said, you can get some great values and opportunities to build in some "sweat equity" by doing some of the remodeling yourself and reaping the extra equity as well as customizing the home to your liking.

While this is just a tip of the iceberg, this should give you some insight to see what is best for you. Visit my website at www.PastDueNoMore.com for additional information to sell or buy distressed properties or contact my office today to talk to a Pro and find out what is best for you with your special and unique circumstances, budget, and situation. You will be glad you did.

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James Endo has been in the real estate industry since 1987 as a loan officer and broker. James is also a foreclosure and short sale specialist. James holds a designation Certified Distressed Property Expert (CDPE) and Certified Foreclosure Prevention Specialist, and is dedicated and committed to help his clients make the right decisions when it matters most!