One of the most common questions we get from buyers interested in real estate in Walnut Creek, the East Bay, or anywhere in California is:
“Can I buy a foreclosure?”

Let’s break down what a foreclosure actually is—and why it’s probably not the deal you think it is.

What Is a Foreclosure?

In real estate terms, a foreclosure occurs when a homeowner stops paying their mortgage. After multiple missed payments and attempts by the lender to collect, the bank ultimately takes back the property through a legal process. At that point, the home becomes bank-owned.

Once the bank officially owns the home, it becomes what’s called an REO property—short for Real Estate Owned (by the bank). The property is usually listed for sale, but there are a few caveats.

Why There Aren’t Many Foreclosures in 2025

The California economy, especially in relatively stable housing markets like Walnut Creek and the East Bay, is currently in decent shape. While interest rates have fluctuated, job losses haven’t surged, and most homeowners still have significant equity in their homes thanks to the market appreciation over the last decade.

That means:

• Few people are defaulting on their mortgages

• Foreclosure inventory is low

• The ones that do exist are not the bargains they used to be

The Problem With Buying a Foreclosure

Even if you find a foreclosure, there are a few things to know:

• Banks often overprice foreclosures. The listing price is usually set by someone at the bank who has never even seen the property—and they often guess high. That means the house can sit for months before the price is adjusted downward.

• Lowballing rarely works. Buyers often think they can make a “deal” by offering way under asking, but banks don’t respond well to that. Most have an internal minimum price threshold and won't accept offers below it, even if the house needs major repairs.

• Banks are slow and bureaucratic. Offers on foreclosures can take weeks (sometimes months) to be reviewed and accepted, and you may be dealing with delayed responses, unclear communication, or missing disclosures.

• Foreclosures are often in poor condition. These homes are typically sold as-is, meaning you inherit any damage, liens, or other issues.

Is It Still Worth Looking for Foreclosures?

If your real estate investment strategy hinges on buying distressed properties at a discount, you might have better luck finding pre-foreclosures or motivated sellers instead of waiting for a rare bank-owned deal.

That means looking for owners who are behind on payments or under financial pressure but haven’t yet lost the property. Working with a skilled real estate broker in Walnut Creek or the East Bay can help uncover these opportunities before they hit the market.

Final Thoughts

Foreclosures in California real estate aren’t what they used to be. If you’re hoping to scoop up a cheap property in Walnut Creek or the surrounding East Bay, you’ll need to adjust your expectations—and possibly your strategy.

The smartest move? Work with someone who understands local market conditions, keeps track of distressed properties, and knows how to negotiate with banks when necessary.

Want to know how many foreclosures are currently on the market—or how to get ahead of the next one?
Message us at Ask Brendan. We’ll help you navigate the process the right way.