Odds Of Closing
March 27, 2010
What’s happening with short sales in Los Gatos?
In the 95030 & 95032 zip codes and with a Los Gatos mailing address (so not necessarily the “incorporated” part that actually belongs to the town per se), for condos, townhomes, houses, and duet homes onlyhomes, right now there are
14 for sale or available (8 houses, 6 condos or townhomes)
16 sale pending
3 closed within the last 30 days (2 houses, 1 condo/TH)
Of the active listings, two of them have been on the market for close to a year.
Info on the Los Gatos short sales which are sold & closed recently:
Of the solds, 2 were houses and one was a townhome. The houses sold for appx 5% less than list, the condo sold for almost 5% over.
If someone were shopping specifically for a Los Gatos short sale, the months of inventory for this subset of the real estate market is currently 4.6 MOI – a seller’s market. And, like in the rest of the market, the good ones go relatively fast. If the home is well priced, nicely presented and appropriately marketed, there are good odds that the home will go under contract.
The average Days on Market of the solds is 50 (but that’s a bit unfair as their numbers were 114 for the townhome and 51 and 12 for the houses).
Average length of escrow (time between everyone agrees on the contract and when the home actually transfers ownership): about 3 1/2 months. (Most escrows close in about 30 days now, unless they’re FHA backed financing, in which case 45 is more typical.) This is the hardest part of the whole process – it is very long, with lots of extra steps and contingencies involved, which means there are loads more opportunities for something to go wrong.
What are the odds that a short sale listing will sell and also close escrow?
It used to be that very few short sales would ever make it to the closing table. A couple of years ago, it seemed that only 20% of short sales were ever closing. Things are improving, though. It takes a lot of time and effort, but more often than not, they are selling. (And this is good for everyone. Banks only make about 40 cents on the dollar on homes they take back in foreclosure, but they make about 65 cents on the dollar in a short sale. It’s all about loss mitigation.)
I ran the numbers and chased down the history on part of the Los Gatos short sale market this afternoon. (95030 and 95032, houses & duet homes only.)
For the period of January 1, 2009 to June 30, 2009, there were 20 different homes listed for sale as short sale listings in Los Gatos, 95030 or 95032. (Some were listed more than once, by different brokers perhaps, so this is just per address.) As of today, a year later, here’s the breakdown of what happened to those 20 properties:
12 are sold and closed – that’s 60%
3 are still on the market
1 is currently a pending sale
4 are off the MLS (show as expired, cancelled or withrawn)
Of the four removed from the MLS, some may have sold privately, been lost to foreclosure, or perhaps the owners were able to work out some other solution, such as a loan modification or getting a tenant into the property to help make the payments.
Overall, though, we do know that 60% of the short sales listed a year ago did eventually sell and close. Most of the rest are still trying.
Whether you’re a buyer or a seller interested in working through a short sale, this change in success rates is good news. You will still need time, skill and patience to work these through, but they are an opportunity – one that seems to be growing all the time.
Please also see these posts for more information on Los Gatos Short Sales
Browse Short Sale Listings & Bank Owned Properties for Sale in Los Gatos (on my other blog, the Valley of Heart’s Delight)