Contrary to public opinion, there are not that many distressed properties exchanging hands in Los Altos and/or Los Altos Hills. According to our local Multiple Listing Service, three short sale properties closed escrow in Los Altos Hills and three in Los Altos within the past year. Currently there are 12 short sale properties on the market and zero bank owned properties for sale.
The life span of a typical short sale listing in Los Altos/Los Altos Hills goes as follows:
- The property is originally listed at a price very close to the debt on the property plus the transaction costs and maybe a little profit
- The property sits on the market for quite a looong time with no activity
- The Seller realizes that they are financially bleeding from every Orifice
- The property is re-listed at a below market value in an effort to induce offers
- The Seller receives multiple offers which are reviewed and submitted to the bank/investor(s)
- Everyone waits to see if a deal can be worked out. Some are, but many aren’t
Below is a graph of short sale properties that are currently or have recently been on the market in Los Altos/Los Altos Hills. I have included the original list price, current approximate debt and list price when the property ratified a purchase offer with the seller.
The actual numbers are below.
Sellers, a home’s value is not based on its loan balance. Price it to the market and try to move on.
If you are thinking of buying a short sale property, check out the amount of debt on it and the number of lenders involved. It may make sense to pass on it if there is too much debt or more than two lenders.
