Property Q&A in Walnut Creek>Question Details

Julie, Home Buyer in Concord, CA

Foreclosures, REO's, Notice of Default: Are any of these types of properties worth considering if I can't walk up to them with cash in hand?

Asked by Julie, Concord, CA Fri Apr 16, 2010

What's the probability of getting considered if you only have 20% to put down?

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REO's work closest to an "ordinary" sale. Short Sales are risky, not so much because of the price/value equation but because of the time it takes to get an answer from the lender. I have a client closing a short sale escrow this Friday from an offer that was made on Christmas day 2009.
0 votes Thank Flag Link Tue Apr 20, 2010

This is a 2-part answer.

PART 1: The listing you showed was from RealtyTrac - what you are seeing is not a listing … it is an advertisement for RealtyTrac.

What you are seeing on is the notice of default for one of the mortgages provided by RealtyTrac OR a foreclosure notice for a trustee sale. RealtyTrac notices can be very deceptive because they often give the loan amounts, not the purchase price. When this particular property does hit the market, it will be at market price for the neighborhood.

RealtyTrac is trying to get you to sign up for their service.

The following links may be helpful:

When Is The Price Not The Price?

It’s Too Good To Be True: REALLY – Top 4 Buyer Myths

If you want to know when these actually hit the market, have a Realtor set you up with an auto-feed that will alert you the moment they become active on the MLS. Let me know if you’d like any additional information.


PART 2: With 20% down you stand a VERY good chance of securing an REO or short sale. There is a lot of competition out there right now, but, as an example, we’ve managed to secure a very large number of transactions in the past year, even for FHA buyers. Make sure you are working with a REALTOR® who has success securing offers in the current market, otherwise you might just be spinning your wheels.

As for notices of default, those most often end up as short sales – there is usually no advantage to trying to set up a pre-foreclosure sale (see the explanation in the link above - It’s Too Good To Be True: REALLY – Top 4 Buyer Myths) unless you are very patient and can wait a long time.
0 votes Thank Flag Link Sat Apr 17, 2010
Hello Julie,

Your chances of getting into any of those properties with 20% down is excellent!! Make sure you are working with a knowledgable Realtor who can get your offer in front of the listing least for serious consideration. If you are new to the market, you may have noticed multiple bids on properties by now but don't let that get you down. I'm sure you'll find something soon enough. Just stay diligent and don't give up!!
Good luck and please feel free to contact me anytime!

Kamal Randhawa
0 votes Thank Flag Link Fri Apr 16, 2010
Hello Julie:

A true foreclosure (that is, buying at auction on the court steps) needs cash. Probably more cash than just enough to buy the home as it probably comes with liens and possibly even ex-owners that have to be ecicted.

Of course this is not a foreclosure. It isn't even for sale. Just another RealtyTrac teaser to get you to sign up for their questionable service.

REOs are certainly worth considering with 20% down. They are not always the best buys though. Regular transactions, REOs and even Short Sales tend to be sold for what they are worth in a strong sellers market such as we have now. Get yourself a good agent with experience in all kinds of transactions and you should do fine with 20% down.

Bernard Gibbons

Bernard Gibbons, DRE License # 01331583
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585 -
0 votes Thank Flag Link Fri Apr 16, 2010
Hello, Julie

Cash offer is very attractive but not always win the deal. Know what is your strength and weakness and have a winning strategy to present the best offer. Let me know if you have any question.

This property you are interested in is not listed for sale .
Web Reference:
0 votes Thank Flag Link Fri Apr 16, 2010
Gosh, Julie

20% is a good down payment.

But if you're looking to buy a foreclosure or a NOD, do engage a seasoned and knowledgeable realtor to help you locate properties that ARE actively offered for sale.

Not everything you see online is for sale. They're there because the Notice of Default/Trustee Sale was filed against the properties, and they become matters of public record

However, the property owners have several options to resolve their delinquency and may not even put the property up for sale.

Enought people have blogged about the unreliability of searching for properties online. I did, too…

A realtor can certainly help you --- including recommending good lenders who can preapprove you for a loan.

Let us help
0 votes Thank Flag Link Fri Apr 16, 2010
The property you listed is from ReatyTrac and does not reflect the true market price of that area. Realtytrac service posts NOD's and Auction amounts, only to attract potential users for their service.

Now, to buy REO's, most Realtors will have access to something that is listed for the general public to purchase. 20% is more than enough for most REO properties.

To buy at the auction block (Court House auction), however, takes a bit more knowledge and you need savvy agents and lawyers to purchase the defaulted properties. In Contra Costa, the auction is held in Martinez. I recommend anyone buying their primary home to not dwell into this unless they have someone that is experienced in this area. You need a cashier's check for the entire amount of the lien anyways, so 20% down isn't going to help.

Then there's Pre-foreclosures (Short sales)...well, you didn't ask that question, but it is dominant in he market place (asides from REO's and regular sales) and cannot be ignored since most banks are trying to streamline the process.
0 votes Thank Flag Link Fri Apr 16, 2010
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