2. If the property fails to sell during short sale, then goes to public auction (or Sheriff's Sale) conducted at county court-house (usually announced ahead on local media such as SJ Mercury, Los Gatos Weekly, etc). If you win the highest bid, you must pay all cash as a buyer.Â
3. If still doesn't sell, then bank foreclose upon and takes over as REO (real estate owned), from this point on, it's very much like a regular sale: you don't have to wait for approval any more, if your offer gets accepted by bank's authorized asset management, you enter escrow and close just like a regular transaction. You can still have your inspection contingency, loan contingency, etc. And you can get pretty good deals this way. The major disadvantage to you as a buyer is: REO has very limited disclosure other than some basic geo-reports, because remember, bank just took over, they didn't know much about what happened on this property in past years, right? So hiring an experienced inspector is crucial, check it out top-down and inside-out!
For any buyers out there who are interested in distressed properties (REO or Short Sale), you can do "Advanced" or one-click search on our website:Â http://SoGoRealty.com
Feel free to contact me if I could be any help, Good Luck :)