Buy Foreclosures to Get a Good Deal?

By Raymond Stoklosa · January 27th, 2009

San Mateo County foreclosures Q: I’ve heard a lot about buying REOs and short sales in order to get a good deal. Will this strategy work in San Mateo County?

A: The media has put a lot of emphasis on the spike in the number of foreclosed homes coming onto the national market, and while there has been an increase in San Mateo County as well, it is nowhere near the jump that other markets have seen.

Of the 1209 single family homes currently for sale in the MLS, only 122 (10.01%) are bank-owned homes commonly known as REO and 284 are characterized as short sales. As San Mateo County has remained a moderately healthy market, we would expect the spring buying season to again heat up the market. This will mean that the best values will be sold quickly.

From my perspective, it seems that buying an REO is a more business-like process which usually takes less time to close escrow as compared to the short sale route. Short sales can often take 3 – 8 months to complete and there is the added difficulty of financially challenged home owners who are desperate for cash. REO properties, while market-priced, can produce greater net value and a smoother purchase.

**Insider tip: It seems that a quirk in the accounting system used by banks opens the door for financial concessions, such as, credits for closing costs, prepaid HOA dues and assessments, seller paid charges and fees customarily paid by the buyer. So, the tactic is to offer the list price (or reasonably close to it) and offset the price with monetary concessions (give-backs) in the form of seller credits to the buyer.

Smart investors are again looking to real estate and the best deals are now found in the REO market. For a free list of bank owned homes and condominiums for sale, register now at SanMateoHomesInfo.com and get looking today.

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