We are sometimes asked about short sale properties (where a lender agrees to take less than the full amount due on a loan). We do not keep a list of short sale properties nor is it a business that we pursue because of some practical problems. Our recent experience has been that banks are too often understaffed and busy dealing with foreclosures that they do not respond to offers on short sale properties in a timely manner and several months afterward they end up going into foreclosure anyway, so the process is frustrating both for seller and buyer.
In November, 2007 California Association of Realtors release a short sale addendum to clarify to the parties that lenders are under no obligation to agree to a short sale and to specify timeframes for performance. Anyone thinking about a short sale transaction should consult legal and/or accounting advice; an overview of some legal aspects of short sale is available through CAR.
If you are looking for a good investment property we suggest you focus more on properties that are undervalued because of poor physical upkeep condition other than compromise location. We are aware of some of these properties and think they make better sense than purusing short sales; if this is of interest to you, please all me at 408-857-8800 if this of interest. There is usually a locational market reason why properties go into foreclosure rather than just the personal circumstances of the owner.