I spent about a year tracking houses through the foreclosure process and in September 2008 I did buy a house at the Trustee sale on the courthouse steps. I ended up buying the house that I was already living in. I’ll say this, It was a very different experience. I left in the morning a renter and came back that afternoon as an owner. No escrow, no title insurance, no loan just a handwritten receipt for the $483.000 in cashiers checks that I had just handed over. A couple of weeks later I got a Trustees deed in the mail which I then recorded at the county recorders office and it was done.
As far as finding the properties there are some free sites like http://www.fidelityasap.comf but at least in my area they only listed a percentage of the homes scheduled for auction. Additionally most of the trustees had their own sites, for example all of Countrywides foreclosures are listed here http://www.recontrustco.com/index.aspx. If you want to track all the upcoming sales you might consider subscribing to a foreclosure tracking service. I used Foreclosureradar.com.I think the price was around $50 per month. Through Foreclosureradar was able to track all of the NOD, NOT and ultimately the sale prices of all the houses in my area.
I was looking for something fairly specific and over the course of the year I was looking I focused on about 6 properties that I followed through the process, one of which I ultimately bought. One thing I learned quickly was that the process can take a very long time and does not necessarily end with a sale at a price that is attractive. Most properties still go back to the bank because nobody would consider buying them at the opening bid price. There is no rhyme or reason to how the opening bid is set. Very few are priced substantially below market and considering that you must pay all cash you are in most cases better to wait until the bank gets it back and lists it for sale. Having said that if you are patient and prepared there are some deals that slip through.
Some examples
-The house I bought had loans totaling $974,000 and a market value of $600,000 (Peak value 1m) and I bought it for $483,000.
-Another house that was on my short list was bought by my business partner for $336,000 and then resold 30 days later for $500,000
Several others I was following turned out to be really bad deals. One went back to the bank for a price well above market and the former owner decided to squat. The house was sold to the bank in Feb of 2008 and the former owner is STILL there. The bank had to file three unlawful detainer lawsuits before finally prevailing in court in December of 2008. Even then the judge gave the old owner 90 more days before they had to leave. I think the moral of this story is to stay away from purchasing at auction any house that is occupied.
My advice to anyone considering buying at the Trustee sale would be to be sure you know what you are buying because there is no changing your mind. Get a title report and be sure you understand what liens will and won’t be extinguished at the sale. Find a way into the property so you can see whats there (or not there) and if you bid on a house that’s occupied understand what it may take in both time and money to evict the former owners.
Happy hunting!