Distressed Properties

We are often asked about short sales and REOs and do they exist in the Burlingame area. As our market is one of the most affluent in the Bay Area, we are fortunate that distressed properties are pretty rare…as in maybe one or two in the City of Burlingame a year, and three or four bank owned properties in Hillsborough. That doesn’t mean there aren’t distressed homeowners, it just means that they are able to find a way to negotiate with their first and/or second lenders to modify their loan, borrow extra funds to pay down their loan, or sell privately.

For investors and the extremely patient and thick skinned buyer, there can be opportunities in San Mateo generally east of 101 in the Parkside and Shoreview neighborhoods, and throughout San Bruno, Daly City, and South San Francisco, where short sales and bank owned properties can easily make up over a third of the available inventory for sale. There are also quite a few short sales and bank owned properties in Redwood City in the under $600K market.

As far as as “closability”, much less than half of short sales on the peninsula successfully close; they eventually become bank owned and are then relisted back on the market. Real estate that is owned by the banks (REOs) are usually priced well to sell in the first couple of weeks on the market as the banks have every incentive to get the home off their books and sell it for a fair price. The main difference between purchasing an REO compared to a normal sale is that an REO generally has no inspection reports or property history (most savvy homeowner sellers provide these to all interest buyers), however the buyer still has the right during the contingency period to have the appropriate inspections done (home, pest, chimney, etc).

Should you wish to learn more about the opportunities for buying distressed properties on the peninsula, contact Raziel.

Watch the below video to hear Raziel talk about why short sales are so difficult for buyers.