If you’re looking to buy a Los Gatos home, you may want to consider purchasing a short sale listing or bank owned property as they are usually more affordable, as real estate prices go, than “regular sales”.
There are a few caveats to buying distressed properties in Los Gatos, though. First, be aware that there are hardly any of these foreclosure or pre-foreclosures homes for sale at any given time in the Town of Los Gatos. At last count, it was about 12% of the real estate inventory altogether (both REOs and short sales combined).
How low will the short sale home seller go? Or the bank if it’s an REO property?
Second, there is some confusion about pricing and discounts. Just as with normal sales, if a short sale house, condo or townhouse is offered at a low price (or is reduced to become attractive) they will sell fast and very likely close to list price. Sometimes you can get a home for much less than list price, but you need to check the comps. In some cases, the home may be priced below a reasonable market value already and it may get bid up, especially if there are multiple offers.
Whoever bids first gets the house, right?
Third, a quick reminder that these sales are not like normal ones in which the first person in contract gets the house. With distressed sales there aren’t a lot of guarantees that the buyer will be able to close on the deal even after acceptance by the seller. With a short sale, remember that the bank or lending institution must approve the sale. If the lender thinks the price is too low, the sale won’t go through unless they buyer goes up in price. Other offers may still come in after yours is accepted, and the bank can simply not approve yours and instead decide, with the seller, to work with the higher offer.
When banks own the property, they want to sell to the highest bidder. You may get into contract only to have the bank find a better offer – and kick you out of escrow! This doesn’t happen in a regular sale, of course. (See also this post: What is a “Kick Out” Clause? )
All disclaimers now made, below please browse the list of available REO listings and short sale listings in Los Gatos, CA.
Browse Los Gatos Short Sale Listings & Bank Owned Properties for Sale