While short sales properties can be cheaper
to buy in some cases, I have witnessed many instances of short sales listings being sold at and even above market value in numerous San Jose neighborhoods.
Here are a few reasons why short sales can be as expensive as regular homes for sale:
1. The intrinsic value of the home, regardless of its status in the foreclosure process, or its location, is simply worth it. A hot property in a desirable neighborhood in San Jose such as Almaden or Willow Glen always retains its status. The only variable changing is the price, which gets adjusted up or down depending on overall and local market conditions. Those properties are never undersold and sell fast on top of it !
2. Price escalation due to multiple bidders is bound to make the offered price of a short sale listing go up. I am always careful to advise my clients not to underbid when I am aware that many other bidders are competing. In some cases, it is even reasonable to make an offer slightly above the asking price - but under the actual appraised value to reassure lenders if any needed - to boost confidence of sellers and show real interest.
3. Whenever a short sales home fails to be sold by its owners and becomes foreclosed, i.e. the property of the lender, the price tag is bound to go up as the bank will always strive to recoup its potential losses (legal fees, unpaid interests, etc). So, while you may deem the price of some short sales listing too steep, bear in mind that the amount asked by homeowners will always be under the level at which a lender will be willing to sell.
At the end of the day, remember that for every real estate transaction, it is not about the price tag or even the status of the home for sale (short sale, REO or foreclosed home), it is about the adequacy of the home for sale to your needs and your ability to pay and/or borrow to purchase it.
Feedback, comments about this post most welcome here
if you feel like.
© Sophia Delacotte CDPE, SFR, CHS
San Jose Realtor
Cell: (408) 717-2575