Many new home buyers in the Brentwood area consider a foreclosed home auction to “get a deal”. Buyers can get good deals at the when working with foreclosed home auction companies such as Hudson & Marshall.  Another good place to look for a foreclosed home auction company is Williams & Williams. But before a buyer decides to purchase a foreclosed home, they need to clearly understand the process, risks and costs before considering purchasing a Brentwood foreclosed home through an auction.

First, in Brentwood all foreclosed home purchase at auction are purchased “as is” with very limited rights of inspection and few disclosures. Inspections and investigations must be done prior to the Brentwood foreclosed home auction. Auction companies typically hold open houses for foreclosed home to allow potential bidders in Brentwood access to view properties and bring in consultants and/or inspectors to conduct their investigations.

Second, the price shown on foreclosed home brochures is often a “starting price” and not the price that will be accepted. Most Brentwood foreclosed home auctions have preset undisclosed “reserve” prices set by the seller. In the event that the winning bid on the foreclosed home is below the reserve the sale will not be concluded. The Brentwood seller may ask the buyer to raise his bid to meet the reserve or decide to put the foreclosed home back in the auction or list it with an REO agent. In short, you can do all the research on the foreclosed home, attend the auction, have the winning bid and still not get the Brentwood property.

Third, be prepared to leave a non-refundable deposit for the foreclosed home and pay a “buyer premium”. The buyer premium is an amount charge above the winning bid price ranging from 3% to 5% of the winning bid amount. This amount charge for the foreclosed home cannot be financed or included as part of the down payment used in the financing of the foreclosed home. Often, the earnest money deposit requirement is equal to the buyer premium. First time buyers, using FHA financing with 3.5% down payments, now have more than double the cash requirements to close.

There are many other issues to consider before buying your Brentwood home at a foreclosure auction. I’ve highlighted just some of the key points and strongly recommend extreme caution and diligence in considering the purchase of a home at auction.

Homeowners have seen their Brentwood and eastern Contra Costa home prices decline by as much as 60% over the past 3 years.  With the decline in values, the only solace for Brentwood area homeowners is the reduction of their property taxes, but many don’t know how to get the Contra Costa County Tax Assessor to review their property values and lower the taxes on their homes.

It’s actually a very simple process to get your Brentwood home value reassessed and property taxes reduced. Under California’s Proposition 8, property owners may get the assessed values of their Brentwood homes “temporarily” reduced based on the market value of their homes on January 1 of each tax year. There is no limit to the amount of the reduction, however, when property value increased in Brentwood the assessed value may also be increased (without Proposition 13 limits) until they exceed the assessed value prior to the Proposition 8 reductions.

Today, there are many companies offering fee based assistance to Brentwood area homeowners to file the paperwork required lower their property taxes with charges for $49 to $100. Do not pay these fees, the process is simple and free.

To request a review of the assessed value of your Brentwood area property, simply write a letter to the Office of Assessor, 2530 Arnold Street, Suite 100, Martinez, CA 94533 or download and complete the Request for Value Review. Make sure to include your name, property address and assessor parcel number (found on your last property tax bill).  You can expedite the review process by including a list of comparable properties sold.

Contact me at flyoung@aol.com  or visit my web page if you’d like a free list of comparable Brentwood, Oakley, Antioch and other Contra Costa home sales.

In 2008, more than 72% of all homes sold in Brentwood and 81% of homes sold in eastern Contra Costa County were foreclosures, also known as REO (Real Estate Owned).  Brentwood and eastern Contra Costa housing prices are less than half of peak prices and there are many great deals for Brentwood home buyers including first time buyers, investors and move-up buyers.

With many home prices falling below $200,000, the availability of low-down-payment FHA loans and interest rates nearing 5%, many renters are buying foreclosed homes in Brentwood, Oakley, Antioch and throughout eastern Contra Costa county.

Investors are also seizing opportunities to buy and rent foreclosed Brentwood homes often seeing positive cash flows.  Brentwood rents remain high as many people who have lost their homes to foreclosure, wish to remain in Brentwood for its quality of life and schools.  Brentwood rents currently average about $1 per square foot from $1500 for a small 3 bedroom rancher to $3000 for a home located on the golf courses at Deer Ridge or Shadow Lakes.

Every new foreclosure property listing in our office at RidgeWater Real Estate has been sold within the first month of listing, often with multiple offers and above asking price in the first week. REO properties in neighborhoods including Tuscany, Deer Ridge, Shadow Lakes and Garin Ranch are getting 10-15 offers within days of listing and often 10-20 percent above the asking price.

Preparation is the key for buying a foreclosed REO Brentwood area home.  Know the neighborhoods you want to live in. Get pre-approved, preferably with a direct lender. Work with a realtor experienced in buying and selling REO properties in Brentwood.  Ask your realtor to send you a list of foreclosed F properties and provide new listings for Brentwood area foreclosed properties as soon as they become available.

I provide many of my clients an email of new listings that meet their customized search criteria for properties in Brentwood or surrounding areas. This allows them to review all new listings including pictures and descriptions of all REO properties as soon as they become available.

A major reason people move to and live in Brentwood is its quality primary, secondary and high schools. To get information about primary and secondary schools in Brentwood you can go to Brentwood Union School District or Liberty Union High School District. To review scores for all Brentwood and Contra Costa County schools at Brentwood School Scores.

Brentwood and Eastern Contra Costa County housing prices are down 60% and greater from peak prices of 2006-2006. Prices of many Brentwood area homes are nearing $100 per square foot, lower than the cost to build. In addition, the monthly payment for the purchase of many Brentwood properties is less than rent, a great opportunity for first time buyers. The bottom is hard to predict, but it is a great time to buy and own a home in Brentwood.

All properties in California have a base tax rate of 1% of the purchase price. In addition, taxpayers in individual cities and counties such as Brentwood and Contra County approve bonds to pay for community facilities, services and schools. Brentwood has no Mello Roos, but there are assessments that are specific to neighborhoods. The best way to calculate taxes for Brentwood homes is to go to the Contra Costa County Tax Collectors site and look up the specific taxes and assessment for any Brentwood home you are interested in purchasing.

A short sale is caused when the seller of the home is selling it for less than the seller owes in mortgages and the offer price must be negotiated and agreed with the banks holding the mortgages. Short sales are complex transactions, and “short” has nothing to do with the time it takes to complete the transaction. Call me if you are considering purchasing a short sale property in Brentwood or if you’d like to discuss listing your Brentwood home as a short sale.

Check out www.BrentwoodConnect.com!

It’s a great place for current residents as well as those considering relocating to Brentwood to get information and answers to questions about Brentwood, its government, schools, social events and community organizations. You can post your questions and/or read postings and responses from others.