San Jose, California Foreclosures
If you have been watching the San Jose real estate market, you know that San Jose foreclosures are starting to play a much bigger role in the market than they have in the past. Furthermore, this role will probably only get bigger as more and more San Jose “shadow inventory” – homes which are in default or in the early stages of the foreclosure process but not yet on the market – turns over and begins making its entrance to the flood of San Jose foreclosures already out there.
For those of us who do keep a watchful eye on real estate, San Jose foreclosures have gone from rarities to relatively commonplace occurrences. During the dot-com boom of the early 2000s, the very idea of San Jose foreclosures was almost unthinkable. Today, however, San Jose foreclosures account for a staggering percentage of homes for sale in San Jose and the surrounding area.
For those who are new to San Jose real estate, San Jose foreclosures, or the real estate game in general, a quick explanation of the foreclosure process might be in order. Basically, a foreclosure is what happens when a homeowner stops paying his or her mortgage and is unable to come to any other arrangement – like a loan modification or a short sale – with his or her lender. This is the story all over the country, and it’s a virtual certainty that most of the San Jose foreclosures on the market today started out this way. Since the homeowner has relinquished his or her rights by defaulting on the mortgage, the seller in a foreclosure is actually the lender or bank – unless some sort of unpredictable complication arises, the original owners of San Jose foreclosures do not participate in the sale of the home.
What this means for prospective buyers of San Jose foreclosures is that what you see is what you get. Banks, even in affluent areas like San Jose, have very little incentive to make improvements or even to maintain the property, since they have already lost a good deal of cash when the homeowner defaulted on the loan. Fortunately for buyers of San Jose foreclosures, many homes in San Jose were built with high standards to begin with, and were originally owned by high-income homeowners who may have been able to afford fairly consistent property upkeep and/or who were only recently forced into default.