I just went through the the assessment appeals board for Santa Clara County with a homeowner who lives in my geographical farm. For those of you who are not familiar with the assessment appeals board, its intention is to be an unbiased, independent panel to preside over disagreements between property owners and the SCC Assessor, pertaining to their assessed property values.

This was my first experience at the appeals board hearing. Due to the number of appeals these hearings are full. They start the process by calling role for all the cases that will be heard that day.  A majority of those called are no shows and many who are present request extensions. Unlike many we were excited to present our case which we believed to be clear and supported by accurate comparables and material facts which affect property value.

This all started months ago when my client requested an informal assessment appeal and the assessor lowered the value of her home but not substantially and not to the value that she felt reflected the true market value of the home. The next step was to request a formal appeal. This would be conducted before a panel and essentially the assessor’s office would have a representative present, and both of you would state your case. The panel would hear and ask questions. Once both sides concluded the panel would convene that hearing and announce that their determination of value would be released within two weeks of the hearing.

Now the whole process seems very fair and designed to be perceived that way. You have equal representation and time and you are allowed to refute the assessor’s findings before what is supposed to be an unbiased, impartial panel.   Here’s where I have a problem with the entire process.

During the period leading up to the hearing the assessor’s representative was communicating with my client and offered to lower the assessed value of the home from $830K to $810K due to her protest.  My client, still not pleased with the result wanted to go through the process. 

The next step was that the agent for the assessor’s office would need come by and take photos of the home and the interior.  My client did not protest since her home was in original condition and had no substantial upgrades.  The images would help support her claim of $725K.  When I heard of this I was a bit taken back.  I apologize if I am over reacting here, and I’m not sure of the true policy of the assessor’s office on this matter, but I feel that a home owner should not have to be obliged to open his home to anyone, even the tax assessor.  Your home is your private domain, and is contents are of no one else’s business and that should be respected.

The other issue that I felt was very suspect was that the assessor did not want to share the comps they used to determine their assessed value.  In a normal court of law you are supposed disclose evidence to the prosecution or defense so they can prepare for cross examination.  This whole principle seemed contrary to the democratic policies that we use to conduct fair hearings.

Lastly this panel is selected by the county and you have no input over who is presiding over the case.  Normally you have input in jury selection or if you are going through arbitration you can both select the arbiter or the arbitration company.  This raises a question as to the legitimacy of the hearing.

At the hearing we presented comps in the same city within 3 months of the transfer of the property and argued that since the condition of the property was poor and the fact that the home’s backyard fence backed directly up into Kiely Blvd., a busy thoroughfare in Santa Clara, with a bus route, that the assessed value was closer to $725K than $810K or roughly 10%.  The assessor’s office picked comps in San Jose that were within a mile away in the same school district but were in a more updated condition and in quieter locations.  One of the member’s of the appeal board asked me how I determined the discount due to the busy street and if I had any evidence to support it.  I could only tell her that a property’s location is the main factor in value for most buyers, and a location such as the one my client has is a huge detriment to buyers.  Most home owner’s would agree.

In the end my client received a letter two days after the hearing and the assessed value was left at $810K.  The appeal board deliberated quickly and made no adjustments for these two material facts, and gave no explanation as to how they determined their decision. 

This is my first experience with the assessment appeals board, but not my last.  I have several properties of clients that are currently going through the formal appeal process and awaiting a date.  I’n my next hearing I will bring additional documentation, irrefutable evidence that shows my client and not leave any aspect up to interpretation.  I hope the result is different. 

For me to claim that the whole process is a sham due to one experience is premature, I wonder what other results home owner’s have had with their experience in front of the SCC Assessment Appeals Board.  If you have had any experience, please leave a comment.Similar Posts:

• Proposition 8 Temporary Assessment Relief, More Information
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With the number of foreclosures skyrocketing in California in recent years, there is a lot of interest from would be buyers in purchasing bank owned properties which are also known as real estate owned or REOs.
What is a short sale?

What is a Short Sale?

Short sales occur when the value of the property is less than the encumbrances or liens on the property.  The property is still owned by the owner and not the bank.  It is being sold with the understanding that the total liens on the property will not be satisfied by the proceeds of the sale.  Therefore the owner will need the lien holders approval to be able to sell the properety.  This can take months to get approved, and may not end in a successful sale.

What is Foreclosure?

When a property is in foreclosure, the owner has stopped making payments and the lender has given the borrower a written Notice of Default that the payments must be brought up to date or the property will be sold off. The notice is a public document (which is why so many websites offer foreclosure lists). It normally takes about two missed payments for a lender to issue a Notice of Default, but not always.

Notice of Trustee’s Sale, after receiving a Notice of Default, the owners of a property allow their home to be foreclosed, then a Notice of Trustee’s Sale gets posted by the trustee. This is usually the trustee holding the primary note. In California, it’s not the bank that forecloses, it’s the Trustee.

Once the trustee decides to foreclose, it goes to a Trustee’s Sale. This sale is held on the courthouse steps in the applicable county. Usually, the bank buys its’ own property from the trustee for the full amount owed on the primary mortgage. In the current market, the price the bank pays to obtain the property is often more than market value. Any subsequent mortgage holders get nothing. The “courthouse steps” is typically not a good place for a potential end-user to buy the property – it’s geared towards investors who buy many properties at wholesale prices. In fact, it can be a downright unfriendly environment if you don’t know how the game is played.

What is an REO?

Once the bank has purchased the home, it is now foreclosed and is called an REO (Real Estate Owned). The bank will then usually list the property at or near full market value and place it on the local MLS.

Finally on the Market. At this point, it shows up on the MLS as an REO and your Realtor can show it to you. Once the bank purchases the home at the Trustee’s Sale and it’s now an REO, the bank tries to get as much for it as possible. The price usually goes back up to at or very near market price.

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With the economy in it’s current state and the housing market seen as the culprit, you can expect that the government is focusing on stimulating housing and home buying.  As a first time home buyer you are already guaranteed an $8000 tax credit if you purchase between January first and November of 2009.

Here is a local first time home buyer program offered by the City of Santa Clara.  It is a $75,000 dollar second mortgage provided by the city towards the purchase of a home in Santa Clara.  Here are some more details below:

City of Santa Clara 1st Time Home Buyer’s Financing Program

How Does The Financing Program Work?
The Financing Program helps first time home buyers purchase a single-family house, town home, or condominium located in the City of Santa Clara.

Who Is Eligible?
People who have not owned a home in the last three years, People whose annual household income is no greater than 120% of the County’s median income (as calculated based on your household size).

What is the maximum assistance amount?
The maximum City second mortgage is $75,000.

Minimum Down Payment Requirement:
3% of the purchase price, more may be required to qualify

What Are The Terms Of The Second Mortgage?
The City’s second mortgage will be a 20-year loan structured in the following way:
For the first 5 years, the City’s loan will be zero percent interest with no payments;
Starting the sixth year through the twentieth year, the City loan converts to the interest rate of the primary loan, and monthly amortized payments of principal and interest are paid.

Is there any equity share with the city if I sell my home?
No, terms are as above.

What loan programs can I go through? Can I refinance if rates come down?
You can go through any approved conventional 30 year fixed mortgage including FHA or CALHFA for the first mortgage. Yes you can refinance as long as it’s a fixed mortgage and no cash out other than to pay off the city loan.

What kind of interest rate can I expect on the first loan?
The interest rates are market rates determined based on the first mortgage guidelines on credit scores and down payment based on program guidelines.

What is the process to get this program?

1. Get pre-qualified to determine maximum purchase price and loan amount (apply online or request application)
2. Provide supporting income and asset documentation
3. Once your pre-approval letter is issued, go out and look for your home!
4. Once you are in contract to purchase, the escrow period to close will take a normal 30 day time frame to close
    

Schedule of 2006 income limits-120% of median income adjusted to family size:

Household Size Maximum Income

•  1 – $ 88,600
•  2 – $101,300
•  3 – $113,900
•  4 – $126,600
•  5 – $136,700
•  6 – $146,900
•  7 – $157,000

To get started download the prequal application:  santa-clara-first-time-home-buyer-prequal

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FREQUENTLY ASKED QUESTIONS

SHORT SALES: THE LONG AND SHORT OF IT

1. What is a short sale?

A short sale* is a sales transaction in which the seller’s lender agrees to accept a payoff of less than the balance due on the loan. In addition to absorbing any loss on the loan, the lender in most cases agrees to pay the costs of the sale.

2. How long does the average short sale take?

It can take anywhere from 28 days to six months once the lender receives a signed offer from both the buyer and seller. The process frequently moves slowly. Currently, many lenders are working to revamp their system to speed up the procedure.

3. If a short sale transaction can take up to six months, why do they call it a “short sale”?

Clearly an oxymoron! Or look at it this way: the value is “shorter” than the loan amount.

The truth is, a short sale has multiple phases that may affect the transaction time frame. Depending on market trends, price positioning, and other factors, it can take anywhere from seven to 180 days or more for a property to sell. Once the negotiations are complete, the short sale proposal is sent to the lender who will evaluate it from a financial perspective. In addition, the homeowner must establish eligibility for the short sale by providing supporting documentation such as, W-2 forms, bank statements, tax returns, and other financial documents. Understandably, this process takes time!

4. Why would a lender agree to a short sale?

There are various reasons why a lender may agree to a short sale. For example, Senate Bill 1137 (which became effective in July 2008) imposes strict requirements on lenders prior to exercising their right to foreclose. Foreclosures take time, and as we all know, time is money.

The expense to the lender is another factor. Foreclosure costs may include: internal fees and expenses, eviction, repairs and maintenance of the property, security, as well as Home Owners Association (HOA) dues and utilities. These factors, combined with the federal and state government’s push to halt foreclosures, make it easy to see why a short sale may be in the lender’s best interest.

5. Is a short sale still an option if foreclosure has already taken place on my home?

No. Once the lender has completed the foreclosure process, a short sale is no longer an option. For that reason, it is vital that homeowners understand the importance of early communication with the lender. Don’t wait until it is too late. Speak to your lender, and let him or her know that you are having financial or other difficulties. If you want to retain ownership of your home, you may be able to work with your lender to explore alternatives to foreclosure.

6. I have a second mortgage on my home. Does this make me ineligible for a short sale?

In many cases, a short sale can be achieved on properties with multiple loans. Depending on the amount of the loss to the junior lien holder (second trust deed), a short sale may be possible under certain circumstances. Proposals and requests for short sale consideration should be submitted to both lenders at the onset.

7. Once I have an offer on my home, what happens next?

Your realtor will assist you in negotiating the best price and terms. Once the negotiations are complete, the offer and all supporting documentation should be packaged and submitted to the lender’s loss mitigation department. Follow-ups and ongoing communications are significant components of a successful short sale.

8. Will I have to pay capital gains taxes if I sell a property as a short sale?

A short sale has no bearing on the calculation of capital gains taxes. However, there are other tax liabilities that must be evaluated. Seek the advice of tax and legal advisors before agreeing to a short sale. For additional information, you may visit www.irs.org to learn more about taxation of short sales.

9. Will a short sale affect my credit?

Yes. Your tax advisor will be able to address your specific situation.

10. I would like to buy a short sale. Where do I start?

Choose a REALTOR® who has the ability to recognize a short sale property and who possesses the skill and training to work through any difficulties that may arise during the buying process. Be prepared for a bumpy road. If your REALTOR® is knowledgeable, he or she will help you manage your expectations.

11. When buying a short sale, do I have to pay all of the escrow fees?

The allocation of costs is a negotiable item in any real estate transaction. Typically, the buyer and seller each pay their own fees.

In short sales, lenders may request that certain fees be paid by the buyer, as a condition of the lender’s approval. Some of these costs may include: funds owed to junior lien holders, closing costs, delinquent property taxes, and Home Owners Association Dues. Expect the unexpected and work with a REALTOR® who understands short sales and can walk you through the process prior to preparing an offer to purchase.

12. How is Coldwell Banker Residential Brokerage simplifying and streamlining the short sale process?

Coldwell Banker Residential Brokerage has been working diligently on a multi-faceted program to educate its managers and sales associates regarding the intricacies of the short sale. In response to the unprecedented challenges today’s homeowners face, the company has developed a unique short sale package that allows Coldwell Banker sales associates to deliver comprehensive proposals to lenders, thereby increasing the likelihood of a successful and swift transaction.

13. How do I determine if I’m eligible for a short sale?

Homeowners must be aware of their options before considering a short sale. Other options include: loan modification/refinance, deed in lieu of foreclosure, foreclosure, and bankruptcy. There are many non-profit counselors available to advise homeowners on the advantages and disadvantages of each of these options. A complete list of counselors may be obtained at www.hud.gov

* When the amount of the loan and other costs of the sale exceed the current market value of the property, there are a number of options struggling homeowners may consider, including loan modification, deed in lieu of foreclosure, foreclosure, bankruptcy and short sale. Any homeowner considering a short sale should consult with legal and tax advisors. A complete list of non-profit counselors is available at www.hud.gov

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Title to real property in Santa Clara County may be held by a single individual or entity, known as Sole Ownership, or by two or more individuals and/or entities known as Co-Ownership. Examples of common ways to hold title are listed below.

Sole Ownership

Where one individual or entity is sole owner of the realty.

1. A Single Individual:
   A single individual who has not been legally married or registered as a Domestic Partner.
2. An Unmarried Man or Unmarried Woman:
   A man or woman who was previously married and is now legally divorced.
3. A Married Man or Married Woman, or Registered Domestic Partner as his/her Sole and Separate Property:
   A married man or woman who is either married or a registered domestic partner who will hold title without a spouse or registered domestic partner (the title company insuring title may specifically require the excluded spouse to relinquish his or her right, title and interest to the realty by recorded quitclaim deed or other recorded instrument).

Co-Ownership

Where two or more individuals or entities are the owners of the realty.

1. Community Project:
   A form of Co-Ownership by a legally married husband and wife.
2. Community Property with Rights of Survivorship:
   A form of Co-Ownership by a legally married husband and wife which includes the benefits of community property and that of joint tenancy.
3. Joint Tenancy:
   A form of Co-Ownership by two or more individuals (none of which can be a corporation, partnership Limited Liability Company or trustees of a trust) in equal shares, by a title created by a single transfer, when expressly declared in the transfer to be a joint tenancy. The joint tenants must derive their title at the same time from a single transfer, share identical interests and have equal rights of possession. On the death of one Co-Tenant the survivor or survivors take no new title but hold the entire estate under the original transfer.
4. Tenancy in Common:
   A form of Co-Ownership with two or more individuals or entities. The interest of each individual or entity may or may not be stated and may not be equal. A Tenant in Common has the right to deal with its interest as it sees fit – sell, hypothecate, lease, gift, etc.

Other Forms of Ownership

Entities created under state law. Such entities are:

1. Corporation:
   An artificial entity created under the authority of the laws of a state usually regarded separate from its shareholders.
2. Partnership:
   An artificial entity created under the authority of the laws of a state as an assoication of two or more individuals or entities to carry on, as co-owners, a business for profit.
3. Limited Liability Companies (L.L.C.):
   An artificial entity created under the authority of the laws of a state and can be considered a hybrid of a corporation and partnership.
4. Trust:
   A confidence in one person to hold and administer for the benefit of another. The legal title to realty is held by the trustee who may be an individual, an entity or both who manages the realty for the benefit of others called the beneficiaries.

For more examples on how to hold title download the Common Ways of Holding Title.

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Frequently new homeowners will ask why they are paying twice as much (or far more) in property taxes than their neighbor. The answer is Proposition 13. Passed by the voters in June, 1978, Proposition 13 is an amendment to the California Constitution that limits the assessment and taxation of property in California. It restricts both the tax rate and the rate of increase allowed in assessing real property as follows: 

• The property tax cannot exceed 1 % of a property’s taxable value, plus bonds approved by the voters, service fees, improvement bonds, and special assessments.

• A property’s original base value is its 1975-76 market value. A new base year value is established by reappraisal, whenever there is a change in ownership or new construction. Except for change in ownership or new construction, the increase in the assessed value of a property is limited to no more than 2% per year.

• Business Personal property, boats, airplanes and certain restricted properties are subject to annual reappraisal and assessment.

• In the case of real property, the adjusted (factored) base year value is the upper limit of value for property tax purposes.

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• The requirements for Proposition 90 in Santa ClaraCounty are the same as for Proposition 60 except for the following:  

• The effective dates and filing fees vary from county to county. Those property owners interested in transferring the base year value from their principal residence located in Santa Clara County to a newly purchased residence in another county should call that county to make sure that the other county is participating in Proposition 90.
• The following is a list of those counties which have approved Proposition 90 and will currently accept base year value transfers from other counties.

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The current trend in the marketplace is focused on the impact of foreclosures across the country. This trend has resulted in various opinions on the types of distressed property sales (Short Sale, Deed in Lieu and Foreclosure) and its impact on a borrower’s FICO score.

This topic, which is raised in news articles, has generated many questions mainly how scores are calculated based on each of the distressed property sale scenarios.

While many people have associated a target point impact anywhere from 100 points on a Short Sale to 280 points on a foreclosure, Fair Isaac has told us that FICO risk scores do not distinguish between the three types of foreclosures. There are so many variables in a consumer’s credit report (do they have collections or other public records?) in addition to the foreclosure account that a point impact is almost impossible to gauge. Further complicating the score prediction is how the foreclosure account is reported, and if a public record accompanies it.

Each article we’ve seen suggests that a Short Sale has less of an impact on an applicant’s FICO score than a Foreclosure, but downplays the fact that there could be legal action taken by the lender on the deficiency balance from a Short Sale. This is the same result as a Foreclosure; a derogatory tradeline plus the Foreclosure Public Record.

Even without the Public Record filing there would still be the reporting of an MOP 8 (method of payment 8) on the Short Sale tradeline. This would have a negative impact on the applicant’s score equivalent to a foreclosure tradeline. Finally, Short Sales are typically facilitated to those applicants who have encountered credit issues. These issues would be reflected in the derogatory reporting of other credit items within the consumer’s credit profile.

Although it still remains unclear the exact impact that these different scenarios can have on one’s FICO, the consenses is that your credit will be severly impacted by either scenario.

Definitions:

Foreclosure: An owners right to their property is terminated, usually by default. Property is purchased back by bank or public auction (sheriffs sale). Proceeds of public auction applied to mortgage debt. Most states will zero out deficiency balance.

Deed in Lieu: An owner avoids foreclosure by voluntarily surrendering their property by deeding to the lender as satisfaction for the debt. Deed in Lieu allows the lender to take possession sooner than would be possible through formal foreclosure.

Short Sale :

A short sale typically is executed to prevent a home foreclosure. A short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount.

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In Santa Clara County credit is everything.  A poor credit rating can affect your purchasing power and your ability to get a home loan. If you have a poor credit history there are many things you can do to restore your credit.  Don’t rely on paying these professional institutions to restore your credit.  Most of these companies are scams and offer guarantees that are unenforceable. 

Feel confident that with some diligence you can restore your credit yourself and through the process learn about creating a good credit history.

Make sure your credit file is accurate. Credit files are maintained by three credit reporting agencies—Experian, Trans Union and Equifax. You can contact one of them and request a copy of your credit report for a small fee. Review the report for errors and outdated information. If you feel that any of the reported information is inaccurate, you can request that the date be removed. The credit agency will contact the creditor who has 30 days to respond and confirm the disputed items. If they do not verify it, the date will be deleted. If the creditor verifies that the information is accurate, you can write a 100-word statement explaining your position and have the credit reporting agency include it in your credit file.

Contact your creditors. Some creditors will remove derogatory information from your credit file if you pay a full or partial payment towards the debt. They may also “re-age” the account by making the current month the first repayment month, thus showing no late payments. You can call the creditor directly to do this.

Add positive information to your file. Send information to the credit bureaus that shows stability and the ability to make payments on time. For any accounts on your credit report that do not show you pay on time, you can send account statements and copies of cancelled check to show your payment history, and the credit bureaus may add them to your history. If you have long-term employment, have lived in the same place for a length of time, etc., be sure to add documentation to your file that shows this stability.

Get credit in your own name.If you are married and your spouse has had financial problems, be sure that you establish credit in your name alone.

Re-establish good credit.If you have had credit problems in the past (especially a bankruptcy or a foreclosure), it is important that you re-establish good credit. There are several ways to do this:

• Get a secured credit card. Many banks will, in exchange for a sum of money deposited with them, give you a credit card. Use the card and make the payments on time. Your credit rating can quickly improve.

• Obtain a secured loan. If you have a passbook savings account or can open one, ask the bank to give you a loan against that money. They keep your passbook until the loan is paid in full. Make sure the bank reports on the loan to the credit bureau.

• Work with a local store. Some businesses will give you credit on a purchase regardless of your credit standing. Although you may pay a higher rate of interest, this in another way of re-establishing good credit.

• Satisfy judgments, liens and collections whereever possible. Make it a priority to satisfy any unpaid judgments, liens, and collections against you, or at the very least try to negotiate with these creditors.

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You hear on the tv and the paper that you can get a great deal on an REO.  You expect 50% savings off your dream home, after all isn’t this the worst real estate market in history?  Sounds great and it might just happen, but first you should take a look at some facts and get prepared.

REO vs. Foreclosure

An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. You see, most foreclosure auctions do not even result in bids. After all, if there was enough equity in the property to satisfy the loan, the owner would have probably sold the property and paid off the bank. That is why the property ends up at a foreclosure or trustee sale.

Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney’s fees and any costs association with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier’s check in your hand for the full amount of your bid. If you are the successful bidder, you receive the property in "as is" condition, which may include someone still living in the property. There may also be other liens against the property.  So you better know what you are buying, and don’t expect your real estate agent to help you out, since foreclosures do not pay commissions.

These days, and the Santa Clara County is no exception, what is owed to the bank is almost always more than what the property is worth, and as a result very few foreclosure auctions result in a successful sale. Then the property "reverts" to the bank. It becomes an REO, or "real estate owned" property.

REO Properties For Sale

The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner’s association dues. As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property.  Much better than buying a foreclosures.

A bank owned property might not be a great bargain. Do your homework before making an offer. Make sure that the price you pay (if you’re successful) is comparable to other homes in the neighborhood. Consider the costs of renovation, including time to complete them. Don’t get caught up in a ‘bidding war’ and pay over market value. Not all REO’s are great deals.

How Banks Sell REO’s

Each bank/lender works a little differently, but they all have similar goals. They want to get the best price possible and have no interest in "dumping" real estate cheaply. Generally, banks have an entire department set up to manage their REO inventory.

Once you make an offer to purchase, banks generally present a "counter-offer." It may be at a higher price than you expect, but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible. You should plan to counter the counter-offer.

Your offer or counter-offer will probably have to be reviewed and approved by several individuals and companies. Even once an offer is accepted, the bank may insert wording like “..subject to corporate approval with 5 days."
Property Condition

Banks always want to sell a property in "as is" condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs.

Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct.

Even though you agreed to “as is," always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes they’ll re-negotiate to save the transaction instead of putting the property back on the market, but don’t take it for granted.

Banks do not want to see a lot of proprietary disclosures; they are exempt from the California Seller’s Transfer Disclosure Statement (TDS-14). If there are real estate agents involved, either representing you or the bank, those agents are required to provide you their disclosure statements.

Some REO’s are in such poor condition it may be difficult to get a lender to lend on the property.  Even the bank who owns the property may not even provide the loan.  Some banks will provide financing on their REOs.  So you definitely want to have a financing and appraisal contingency.

Making an Offer

Offers are usually FAXED to the bank. The listing agent needs your originals. There is no formal presentation. Keep in mind: nothing happens evenings and weekends since the banks are closed.

In Santa Clara County which by national standards is an active real estate market there are thousands of REO properties.   Some localities have more REO’s than others.  Where there are fewer REOs, areas like Sunnyvale, Mountain View, Santa Clara, Saratoga, and Cupertino don’t expect to get that great of a deal on an REO property.  In areas like South San Jose, East Valley, Milpitas, Morgan Hill, Blossom Valley, and Gilroy, where REO’s and Short Sales make up a large percentage of the total inventory, you will see that prices have dropped significantly.  This will include standard homes that are competeing with REO’s.

If you still want to buy an REO, make sure you find a Realtor who knows the market in the area you are looking, and can decipher if its a good deal or not.

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