Hello lmc and thanks for the information.
The Notice of Default or NOD is the first step in the foreclosure process--we call this the "preforeclosure" property. Here in California from date of recordation of the NOD to the date of sale can be roughly four to five months. The last step is the Notice of Sale, which usually is provided to the homeowner just 30 days prior to sale. Anytime during the "default period", the homeowner may ask for additional time to work things out, request a loan modification, request approval for a short sale, or allow the home to be sold. In some cases, as I mentioned previously, the homeowner just "gives up" the home by transferring to the bank a deed-in-lieu, which, basically, returns ownership of the home to the bank by the owner without having to go through a public transfer of ownership. As a result of the many ways in which a Trustee's Sale may be stalled, there are only a small percentage of homes that will be actually sold on the courthouse steps on the scheduled date of sale. Here in Santa Clara only about 10 percent of the homes scheduled for sale make it to auction, and the amount in Tracy may be slightly higher--say 25-30 percent, but the vast majority of the remaining homes for sale will end up being cancelled or postponed on the very day of the sale.
I would not recommend to anyone that they purchase a home in a Trustee's Sale at this time since most of the homes have sales prices that are less than the outstanding amount of mortgage owed--a situation we call "being underwater" or "upside down". At a Trustee's Sale, often there are no bidders on the home except the bank because the "minimum bid" would be equivalent to the outstanding mortgage plus expenses on the home.
Even after the home is sold back to the bank, the bank will often take as long as 90 days for the home to reappear on the MLS, if it shows up there at all. Because there is no requirement that a home ever be advertised on the local MLS, REO properties may also show up exclusively on the websites of asset managers or foreclosure disposition agents or for larger brokerages, such as Coldwell Banker, might be listed only on CB's exclusive listing websites. Part of the delay in bringing a home to market is based on practical issues--clearing title issues, removing items left by the previous owners, cleaning and preparing the property for market. Part of the delay is also purposeful in timing the home's appearance in a way that does not produce a huge glut of homes at one time, as well as bringing the home for sale at optimal periods in the year. Either way, don't expect most of the homes that foreclose in any month to appear for sale for about 30-90 days.
I hope this answers your question. Good luck and happy house hunting!
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA