The question every short sale & foreclosure specialist in San Jose is asked by almost all buyers interested to purchase a short sale property is whether a short sale listing is cheaper to buy than a regular home.
The answer I give is always the same: in some cases, it can be cheaper, in other cases, it can be as or even more expensive than regular homes.
Here are at least 3 reasons why a short sale property can be cheaper to buy:
1. the supply of short sales in the designated neighborhood exceeds demand. In other words, homeowners will need to price their home competitively vs. others in similar situation if they want to sell. Always remember that a short sale is like a race against time as homeowners need to repay the amount due to their lender(s) before the foreclosure occurs. They are not in a position to bargain with potential buyers for too long and will price their homes to sell.
2. the short sale listing is located in an area which has become less desirable, for instance due to higher crime rates or as a result of a business/ industrial site closure or simply because a local school closed its doors. The same logic applies to regular homes for sale as well by the way.
3. the property in short sale is not well tended and/or has been damaged by its current owners. To start with, homeowners will remove appliances and any features or equipment (e.g. heaters, etc) that can be re-used in their next home. Worse case scenario, often out of vengeance against the lender, and before being forced into foreclosure, homeowners can take extreme measures to damage the property (A/C, pipes, etc).
Check my next post
to understand why short sales properties can be sometimes as expensive as regular homes for sale.
© Sophia Delacotte CDPE, SFR, CHS
San Jose Realtor
Cell: (408) 717-2575