During my most recent open house I had a few people ask if I was aware of any foreclosures in Los Altos or Los Altos Hills. I said yes but also pointed out that very few homes ever become REO (bank owned) property in Los Altos or Los Altos Hills for several reasons including:
Strong buyer demand
Ability to sell as a short sale
Significant equity in the home
So, will you get a deal on a foreclosure in Los Altos or Los Altos Hills? Not likely. Why? Because the homes that are listed as short sales that have eventually become REOs are usually in poor locations and didn't sell in the open market for a reason. One street in Los Altos Hills that has been a few of these is Elena Road. The homes that have had trouble selling there have been close to 280 and priced too high. The banks have been unwilling to reduce the price they take so the homes languish. The short sale home on Lincoln Ave is in disrepair so potential buyers will have to look past the potential repair costs to get a good value.
Los Altos - Foreclosure vs. Short Sales Deals
One home that recently transitioned from short sale to foreclosure is facing the same issue that others have, the buyers want a deal but the bank won't reduce the price. One home in South Los Altos on Richardson Avenue has been on the market for a long time but the bank won't take less than the asking price.
The few foreclosed homes that have come up in Los Altos Hills include a couple that were underpriced on purpose (under $1 million) and ended up receiving dozens of offers hundreds of thousands of dollars over the asking price.
Can You Get A Deal In Los Altos?
You may but don't count on it. As I said, the few homes or properties that have become REOs are usually in poor locations and not the best investment. The ones that have come up in good locations sell quickly at market rates. If you're looking to save money on a home in Los Altos, I recommend looking at homes that have been overpriced and negotiate with the seller on a value in line with the market. Remember, prices are trending up slowly in Los Altos so buying before the Spring push could get you a great deal!