Foreclosure buyers use “Sherlock” attitude
As part of my journey into real estate investment education, I decided to visit the San Mateo County Courthouse “steps” to watch a trustee sale a few weeks ago. I have seen a private auction but never this final step in the foreclosure process before the property becomes bank-owned (REO) – the Trustee Sale. This link shows where the Trustee’s Sale is in the foreclosure process. More about the link below.
It was surprisingly low key when I got there on a recent early Spring day (sorry Michigan friends!). Then a few more people showed up for a total of about 10 people. Most of the people there were seasoned investors. By seasoned I mean, they are there all the time with their dog-eared list in hand and have mega millions to work with. I know this because one of the Foreclosure Agents shared some information with me about who buys, how they buy, where the foreclosure market is heading in San Mateo.
That day 20 properties were up for auction; 5 were postponed and new dates given; and 15 went to the respective banks because nobody bid on them at the minimum auction price. The sheets were getting updated right then and there. Sadly, one homeowner was desperately trying to hold onto her home at this eleventh hour; as far as I could tell, her home was not sold to the bank while I was there. It is my understanding that the lender with the primary lien establishes the minimum auction price. (My CB training in this starts Monday.) In other words, none of the investors and bidders there thought the properties were enough of a “deal” to bid at the minimum price. This is one day’s activity and Trustee’s Sales happen throughout the week depending on the number of properties available.
This experience was totally worth the 90 minutes I decided to allow myself. There is NOTHING like first-hand education, as reinforced by seasoned investor Jeff Brown, whose blog I follow at BawldGuyTalking. I also took the time because I wanted to find out what’s really going on in San Mateo County.
Bottom line: There are foreclosure properties out there, and probably more coming through the remainder of ’08. Buying such a property requires research, patience, ready cash…and a bit of a stomach! Support of your team may be helpful to some and crucial for others (be it contractor, accountant, real estate professional, loan consultant, or parents).
If you’re interested in starting your own online research, I just got this tip from Kevin Boer about foreclosureradar.com. I’ll be tracking it along with where I currently have an account, Realtytrac, to look for San Mateo County trends. My Realtytrac research has shown their properties to be pretty out of date so I may try to find another one to use as a comparison to foreclosureradar. If you know of another good one, make a comment to share with everyone.
Colleague Sam Benson in Contra Costa County updates us on foreclosure property activity there.
Colleague Pam Buda in Sonoma County told me yesterday that there are over 200 short sale or foreclosure properties just in her office. Did I hear that right?
5:30 p.m. – Elaine Carlson from the Palos Verdes Peninsula writes an open letter to buyers on this subject if you’re thinking of investing in her area of southern California.