Traps in the Short Sale Market
In the current climate we have seen property values in San Jose alone fall by 25 % in the past 12 months. With continuing negativity in the South Bay, the fact that short sales are notorious for taking up to 8 months to close will mean that a buyer needs to keep abreast of changes in the property market while their offer is being considered.
Lenders of course are engaging in a slow process of loss acceptance and soon it will be the benchmark disposition for distressed property creditors.
While they seek to extract themselves from a bad debt, they too need to evaluate their circumstances and often the reason a lender procrastinates indefinitely is due to the lack of market information they received from those interested in pursuing the short sale.
Particularly in the South Bay area, only 20 % of short sales will close on escrow. This poor success rate has many agents unwilling to invest their resources of time or otherwise in the pursuit of these opportunities, and so the market will invariably suffer for this omission.
However, in a rapidly falling market, it appears that many banks are using the short sale as an option to sell by delaying the process of approval which of course is in their favor. After enjoying the right of inaction for six months, the banks are able to then draw on the patience of the unwitting buyer who is still committing to a price that bears little resemblance to the current market.
In order for the buyer to still obtain a theoretical edge, close monitoring of the market and fundamental factors affecting property will need to be maintained. Of course this practice achieves little if the approval process needs to be restarted at every juncture.
There is considerable merit in respect of property in the Santa Clara Region, to take a broader perspective on the acquisition, and given the sound fundamentals of the South Bay and Silicon Valley, aspire to close a deal after a well thought out offer has been presented. Invariably, any market will feel like it is plummeting through the floor when at its bottom, and with quality property such as the lucrative Valley, it will feel no different. The principal objective ought to instead be that of acquiring an investment in the South Bay. Whether this is accomplished with the further assistance of $10 000 – $20 000 humored in predicting the bottom of the market matters little. In the long term what will remain crucial is the acquisition of the property not its precise entry level.
Amidst the current status quo, the South Bay represents impressive potential for investment. In consideration of a new ideology emerging in the investment and finance world toward intellectual property, it remains clear that property in this neck of the woods will garner the respect of capital for a number of generations to come.
This being the case, the best offer to make on a short sale in this district is the offer that is well researched and adhered to.
Posted by Eureka Expert
on Mar 20 2010. Filed under Housing, Short Sales.
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