To the average home buyer or novice investor the trustee sale and auction process can be very confusing. We decided to write this article to help our readers better understand how the process works. In order to better understand the process will first review how an individual property goes into default and is scheduled for trustee sale. California is a trustee deed state meaning there are three parties involved in the mortgage note: trustee (acts as a representative of the lender to effectuate the sale, which typically occurs in the form of an auction), trustor (borrower), and beneficiary (lender). A notice of default is recorded after a default occurs in the county in which the property is located. This does not necessarily occur after one or more payments are not met but for logistical reasons may occur after a loan is in substantial default - sometimes six months or more past due. This is known as the redemption period. The foreclosure process does not move forward for a minimum of 60 days. A notice of sale containing the name and address of trustee, certain disclosures (including that the property is about to be lost to foreclosure sale), the name of the beneficiary, and other information must be recorded in the county in which the property is located at least 14 days before any foreclosure sale after that time period. This is known as the publication period. The borrower must receive a twenty (20) day notice before any foreclosure sale, further notice of the foreclosure must: (a) mailed to the defaulting borrower (and other creditors whose liens affect the property) and; (b) be posted at the property being foreclosed upon and in a public place in the county where any sale would occur. The defaulting borrower may prevent the foreclosure sale by paying all arrearages up to five (5) days before the sale. The trustees' foreclosure sale then occurs at the earliest twenty one (21) days after the first publication. Foreclosure sales must take place on any business day between the hours of 9AM and 5PM and must occur at the location referenced on the notice of sale. The trustee will auction the property to the highest bidder, including the lender. The borrower is permitted to postpone the sale for one (1) day.

It is important that we distinguish between different types of auctions that are currently on the market. There are many private auctions that are open to the public like REDC, Williamson and Williamson, and a handful of others. These private auctions that are open to the public are not trustee sale auctions. Many banks and sellers utilize these types of sales in lieu of the traditional sale using an agent listing on local Multiple Listing Services. An agent may still represent a buyer in the purchase of a private auction sale and may still receive a commission based upon the action agreement. The seller generally can bid as long as they can provide a sufficient deposit and prove ability to finance or pay cash. At a Trustee Sale the auctioneer will require proof of cash, typically cashier's checks for at least the minimum opening bid price, in order to participate. Financing is not an option at a trustee sale as the auctioneer will not allow bidding based on a pre-approval letter or proof of financing. Cash Only. Opening bid price is established by the trustee and beneficiary prior to the sale date. An opening bidder will typically bid 1 penny over the opening bid and any other bidders that have qualified with the auctioneer will make higher bids based on their comfort level and threshold for return on the possible investment. The winning bidder will sign over cashier checks immediately after the sale and the trustee company will process and send out the unrecorded grant deed to the new owner to record within a few business days.

A Homeowner's Association, or HOA, is an organization created by a developer for the purpose of developing, managing and selling a tract of homes in a particular area. It allows them to exit financial and legal responsibilities of the community; typically by transferring ownership of the association and common areas to the homeowner's after selling a predetermined number of lots within the association. Most HOA's are incorporated, and are subject to state statutes for non-profits and HOA's.

Each HOA differs in their responsibilities to the community, however, most larger HOA's typically have a management company that is responsible to manage the accounting of monthly dues and budgets, maintenance of common areas, and to enforce community architectural guidelines set forth by the developer, which will a governing board of homeowner's within the community, once all homes in the tract are sold. Many homeowners' association boards may even be required to approve landscaping plans for front, side and rear yards of individual homes. These governing guidelines are enforced to ultimately maintain the value of the homes within the community. Smaller HOA's are typically self-managed; however the common responsibilities are the same. Membership to an HOA and paying dues to the association are not optional. Upon becoming an owner of a home within a community governed by an HOA, requires the owner to pay the monthly dues and abide by the guidelines of ownership set forth by the governing board.

HOA's play a key role in the transfer of ownership in the sale of the homes within the association. The Seller of the home is required to provide all governing documents to the purchaser before ownership is finally transferred. The documents that transfer include the Covenants, Conditions and Restrictions, Budget, Financials and meeting minutes for the fiscal year of monthly board meetings. This allows the buyer to be aware of the associations' amenities, the buyer's monthly dues, and conduct requirements, any special assessments in the community, as well as the financial status and any pending litigation within of the HOA. This helps to insure the Buyer is receiving all necessary information pertaining to the HOA before purchasing a home within the community.

When asking yourself, What should I do to my home to increase its value? there are many answers. However, the answers all depend on whether or not you are looking to sell sooner, or later. The easiest improvements are oftentimes the ones which will lead to the most bang for your buck. Ask yourself, If I was walking into this home for the first time, what would influence me to either put in an offer or not? Then, write down all of the items that you believe would influence a potential buyer. Put your list of improvements in order from what you believe are the lowest cost improvements up to the higher cost improvements. What you should do as soon as you have this list is consult an area expert on which improvements.

Every home is different. In helping many of our previous clients we have recommended repairs as small as putting outlet covers on a few of the cracked outlets. Of course, there have been other times when we have recommended a complete kitchen & bathroom overhaul as every $1 spent yielded $3 - $5 in ultimate resale value.

Remember that if you are going to sell your current home within the next 3-6 months, then it may make sense to do some high dollar repairs. However, if you are looking at living in your home & you will not be selling for over a year, then the repairs that you make today may have little impact on your homes ultimate value once you go to sell it in the future. The importance of having a highly educated & trained REALTOR ® on your side in finding those repairs that will get you the biggest bang for your buck is extremely important. Hire a highly educated REALTOR ® to go over the best improvements with you. We are staffed with professionals ready to help you, so feel free to contact one of our San Diego real estate agents. We specialize in Southern California real estate of all types, and we are happy to assist you any way that we can.

For an in depth review on how to inexpensively increase the value of your home see the WikiHow page for some good ideas.