Even during the current housing market, certain areas have seen increased buyer interest. As discussed in the following report from the Wall Street Journal, California’s Santa Clara County has seen such increases especially on properties that are in superior condition.

Bidding Wars Spring Up for Foreclosed Properties in California 

In California’s Santa Clara County, there’s a large number of houses for sale for $450,000 or less — 900 of them. Many of the cheapest homes REO homes, for “real estated owned” by the lender. According to the article, banks eager to unload REO inventory — a large chunk of the cheapest houses for sale in the county — have been lowering listing prices. It’s become common to find bank-owned houses in South San Jose priced at roughly $400,000 that last sold in 2005 or 2006 for $600,000 or more, writes Sue McAllister of the Mercury News.

Sounds like great news for house hunters — but, as Ms. McAllister writes, many are getting swept up in bidding wars. Ms. McAllister highlights the experience of one San Jose couple who already have been outbid on four homes priced at about $500,000.

The lower prices have helped spur buyers’ interest, the article says, especially because “regular” sellers generally have not brought asking prices down to meet the banks’ prices. Also, trying to buy homes in “short sales” — when a lender allows a homeowner to sell for less than is owed on the mortgage — another option for entry-level buyers, has proved frustrating, time-consuming and often fruitless.

With more demand for REOs, multiple offers abound, says one agent quoted in the article. “It’s a secret nobody knows,” he said. “You have to write a full-price offer. If you want it, everybody wants it.”

Not all REO homes are attracting this kind of interest, the article says. The ones that get multiple bids are those in the best condition – like one home in South San Jose with a stainless steel dishwasher, Pergo floors and views of downtown that got five offers after only two days on the market, Ms. McAllister says.

To view the online report, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 500 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.