how to buy a foreclosure at auction in california

Consequently, many houses receive no bids at auction, and the lender ends up putting the house on the market through a broker.
In both my day job covering the housing market and my own search for a house, I’ve seen what has worked for many buyers of foreclosed homes.
Buying a foreclosed house at a "courthouse steps" auction requires a good amount of knowledge — and cash.
If a house is up for auction with an opening bid far below its current market value, it’s likely to be snatched up by professionals who regularly attend the auctions, armed with stacks of cashier’s checks to pay the full amount.
But a foreclosed house might still be an easier way to get what you want than trying to get stubborn individual sellers to lower their list prices.

Attend several local house auctions in the area where you want to buy, whether you are interested in the particular property or not, so you can watch and get a feel for the auction process.
ForeclosureRadar, a comprehensive auction-tracking tool for real estate professionals, states that 80 percent of homes that were auctioned in California in February of 2009 were sold at an average of 36.3 percent below listing price and 40 percent of the homes sold at auctions were sold for 50 percent or a greater discount.
If you bought a second position at auction, your purchase will still be subordinate to the first position , which could foreclose, wiping out the subordinate liens, so all the money you spent would be a waste.
REMEMBER: The house is being sold as-is and the auction house makes no warranties on anything and doesn’t care if you can’t get the money in 30 days.
In Arizona, for example, you only need to put an earnest money deposit down at the auction, but you’ll only have a few days to pay in full.
But if you can pull off buying a house at auction, you can get into a home for as much as 50 percent off list price.
If you’re wondering if you can save money by buying a foreclosed home to LIVE IN and you DO NOT have a lump sum of cash (from savings or an inheritance, perhaps), auctions aren’t the way to go.
Fair warning: If you have a full-time job (and you aren’t in real estate), it could be challenging to find the necessary time to prepare to bid at a housing auction and do the necessary research.
Each county’s auctions are run a little bit differently, and you’ll want to know the ins and outs of the auction in your particular area long before bidding.
Because the auction purchases come with all existing liens and encumbrances, a title search in the form of a preliminary title report will help to identify things like IRS liens or past-due taxes that you, as the new buyer, must pay.
Once you understand the auction process, you’ll want to start tracking foreclosures.
If your goal is to fix and flip the property, you need to take the ARV and subtract the repair estimates, your holding costs, listing expenses if you’re going to list it with a Realtor and the profit that you want to take as well.
Most of the auction homes hav been on the market for 18 to 24 months because of their high price and stagnant economy.
There is a rather lengthy notice and cure period between the time a property owner receives a notice of default until the property is sold at a public foreclosure auction sale – usually about four (4) months or more.
Many California properties are bought at public foreclosure auction sales, but the competition may be strong and the prices are higher than during preforeclosure to cover the lender’s legal costs.
Therefore, a deficiency judgment may not be obtained when a property in foreclosure is sold through a non-judicial public foreclosure auction sale or if the foreclosure relates to a purchase money mortgage.
If you wait until the public foreclosure auction sale – or afterwards – the competition may be stronger and the prices will be higher to cover the lender’s legal costs.
To find these sales, read newspaper notices prior to the auction date, look for public notice posted – when required – on the property, or search other public places in the county where the real estate is located.
Many buyers go through real estate agents who specialize in foreclosures, but if there’s a particular property you have an eye on, Blomquist says you can approach the lender directly after the foreclosure but before it’s listed for sale.
First of all, if you’re new to the foreclosure market, don’t even think about buying a property at a foreclosure auction, says RealtyTrac vice president Daren Blomquist.
If you’re seeking to purchase a foreclosure with an FHA loan, Blomquist says the requirements pertaining to the condition of the property are stricter.
The bank that owns the title isn’t going to make needed repairs for you before the sale, and it’s unlikely to lower the price to compensate you for repair expenses you’ll incur.
Factor the cost of any necessary repairs into your budget, since foreclosures are generally sold “as-is.” “Be aware with these REO or bank-owned properties that a lot of them are in pretty poor condition,” Blomquist says.
The bank is required to pay off senior liens like back taxes, you won’t have to kick out anyone living there and you’ll be able to inspect the homes for damage and figure out how much you’ll need to set aside for any repairs.
An increase in foreclosure activity might sound like bad news, but it’s actually a good sign for these markets because it means the logjam that’s been keeping housing in the doldrums is finally starting to break up.
Prospective buyers can’t inspect the home to determine if there’s any damage — highly likely if the house has been vacant for a while — or find out if there are any senior liens (such as outstanding taxes owed on the property).
However, with judicial foreclosure the previous owner has up to one year to redeem his property by paying the foreclosure sale plus interest and any additional expenses incurred by the lender.
In California, foreclosure sales are held on business days from 9 a.m. to 5 p.m. You are not allowed to view the property before bidding, anyone can bid, and the foreclosure can be postponed to another time and location by the trustee managing the sale.
There are three stages at which you can buy a foreclosure: during pre-foreclosure, at an auction sale and as a bank-owned property, also known as a real estate owned (REO) property.
From then, they have three months to make up for the default on the mortgage before the lender schedules a foreclosure sale.
There are several online foreclosure listing sites, like, and They allow you to filter your search by area, price or even number of bedrooms.
If the owners cannot afford their mortgage, they might accept a low offer that covers their mortgage balance, in order to avoid a foreclosure.
If there are outstanding liens on the property, the winning bidder at the auction may be responsible to satisfy these liens in some cases, so it’s important to check for any liens and the priority of the liens before you bid at the auction.
Some states have redemption periods for the owner, in which case the owner can buy the property back from you if they pay the full amount paid at the auction, plus applicable fees.
It’s also important to determine the bid amount even in states where you don’t need to bring the full amount to the auction.
Determining your bid amount is more obviously important in states where bidders are required to bring the full amount in cash or cashier’s check to the auction.
It’s important to know this amount so you can determine if the auction represents a potential bargain purchase when the opening bid is compared to the property’s market value.
After a property is scheduled for auction, the owner has a chance (typically less than a month) to stop the auction by paying the amount owed to the foreclosing lender.
In other states, bidders are required to bring a certain percentage (10 percent is common) of the bid amount to the auction and pay the remainder of the amount within a certain timeframe if they are the highest bidder.
In some states, bidders are required to bring the full amount they want to bid in the form of cash or cashier’s check to the auction.
The opening bid at the auction is based on the total amount owed to the foreclosing lender and may include fees incurred because of the foreclosure proceedings.
RealtyTrac subscribers have access to the opening bid amount and the estimated market value for properties scheduled for auction.
A reasonable purchase amount at auction is at least 20 percent below full market value, and much better deals are often possible.
The property listing data and information, and the Images, are for the personal, non-commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing.
The former football star famous for his controversial acquittal in the 1994 murder of wife Nicole Brown Simpson, lost his Miami home on Tuesday in a private foreclosure auction.
The 4,334-square-foot home with a swimming pool was sold for $655,000 to an as-yet-unidentified bidder, while 66-year-old Simpson is currently behind bars at a Nevada prison on a robbery conviction.
While Simpson was let off in the murder case of his wife and her friend Rob Goldman, he was ordered to pay Goldman’s father Fred Goldman $33.5million in a judgement that found him liable for the waiter’s death.
Locked up: Simpson is currently behind bars in Nevada on a robbery conviction and won’t be eligible for parole until 2017.
Simpson was found guilty of working with a group of armed men to steal sports memorabilia at the Palace Station hotel on September 13, 2007.
The gloves don’t fit: Simpson was famously acquitted of the 1994 murder of his wife Nicole Brown Simpson.
However, Simpson lost control of the home last year when he got behind on more than two years worth of mortgage payments.
Sperry Van Ness Gryphon Parker Commercial Realty and auctioneer Richard Kruse completed another Online Only Foreclosure Auction with the sale yesterday of 2358 D Woodbrook Circle South and 1991 Hoadley Drive, both in Columbus, Ohio.
In contrast to the normal Sheriff Sale process conducted in court houses across the state each week, the Woodbrook /Hoadley auction was heavily marketed with print marketing, postcards, email blast, press releases and online promotion including syndication to over 100 other sites plus social media such as Facebook and Twitter.
Ohio House Bill 586 calls for modifications to the current that would allow creditor’s the option to make a simple election to use a Private Selling Officer who could accept written or electronic bids, waive bid deposits for creditors holding liens on the property, postpone a sale at the request of creditor one or more times up to 180 days and conduct the sale at location outside the county.
Sperry Van Ness Gryphon Parker provides brokerage, management, leasing and auction services throughout the State of Ohio and works with a national buyer and seller base including affluent individuals, corporations and lending institutions.
Ohio Revised Code Section 2335.021 provides that a court may appoint an auctioneer to conduct an auction of real property required in lieu of the county Sheriff.
The seller, unaware that his deed of trust contained an "assignment of rents" — meaning the lender had a right to collect the rent if the owner did not make his payments — stopped paying on his piggyback loans and didn’t much care who he rented to as long as they paid him.
The lender (who held both the first and the second loan) filed for foreclosure and vowed to file a deficiency judgment against the seller, which junior lenders can do in California if the loans were not purchase money.

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