Any experience buying at auction in Contra Costa County, Cal

Foreclosures
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Any experience buying at auction in Contra Costa County, Cal

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Member since 2008 · 7 posts · 0 votes

I'm looking into better ways of buying flip properties rather than going through MLS. I've found good deals on MLS, but they are few and far between, and now I need to get a higher volume of deal flow. Does anyone have any experience buying foreclosures at the weekly auction at the Martinez Courthouse for Contra Costa County? Specifically, do you pay the entire amount in cash at the time of the auction, or do you put 10% down and close within a certain amount of days? How much due dilligence do you typically do before bidding? Is there an easy way to see the results of past auctions (i.e which ones went back to the bank vs. sold to private bidders, price sold, etc.)? My understanding is that most go back to the bank and become REO's. If this is the case, do you try to buy from the bank before the auction and have them cancel the auction? Any comments are appreciated…

-Josh

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  • Richard Warren
    Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
    19y
    Originally posted by "BayAreaREI":
    My understanding is that most go back to the bank and become REO’s. If this is the case, do you try to buy from the bank before the auction and have them cancel the auction? Any comments are appreciated…

    -Josh

    You can’t buy from the bank prior to the auction because the bank does not own the property. It does not become theirs until it is awarded to them as the high bidder.

    8)

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    OP
    Member since 2008 · 7 posts · 0 votes
    19y

    Thanks for the response. That makes sense, the auction is the legal milestone that puts the property up for sale so it would be illegal to bypass the foreclosure process.

    Any general idea of what %FMV to expect from an auction? I'm guessing it varies widely depending on local market conditions, but do you know of any typical hurdles (say 65% or 70%) that generally make the added risk (i.e. title and lien risk) worthwhile?

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  • Account Closed
    Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
    19y

    Buying before the auction involves buying from the borrower/owner who is about to lose the property. If you can arrange a short sale that is also an option. You are still buying from the owner.

    Banks occasionally will sell the loan before the foreclosure. Not all that common but something to remember. More likely if you approach the junior lien holders but you need to understand if the property has enough value to cover the junior liens.

    You can buy at auction. Check the local rules. In almost all cases you will find that you have to have all cash when you bid. No time to arrange a mortgage after the fact. Any inspections you want to conduct before committing yourself need to happen before the auction. You might not be able to gain access and the utilities might be turned off. You also need to check the title to see what is going on.

    You can buy after the auction from the winning bidder. That could be the lender (hence an REO) or it could be someone else. As noted, the auction is what triggers the transfer of title.

    All sales will be recorded in the records. There could be a delay between the auction and when the records are updated. All the details are public so you should be able to find out what you want given what you asked.

    John Corey

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  • Greg E
    Sacramento, CA · Member since 2008 · 108 posts · 7 votes
    19y
    You may want to review CC2924 for details on California foreclosure process. Purchasing at trustee's sales in all counties in CA requires purchasers to have all cash/cashier's checks. Due diligence? You need to be able to do your own title search to ensure you know the liens outstanding and the position of the foreclosing DOT. You obviously need to know the property's value, estimate your costs to secure and rehab, project your marketing time or exit strategy.
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