In California the entire bid amount at a foreclosure auction is all due the moment your winning bid is accepted. Because that's the rule, the auctioneer is obliged to "qualify" everyone intending to bid before the sale starts. One by one, each bidder will discreetly show her the total sum of the checks they brought to bid with. The auctioneer will note each qualifier's maximum bid total in such a way that other bidders won't see it.

Therefore, all bidders are advised to show up with the maximum amount they intend to bid. And they should expect to get change back from the foreclosing trustee if their winning bid is less than the amount of their tendered checks.

To keep my overbid amount as low as possible I always show up with my checks in a doubled-up progression, starting with a check for $1,000, then another for $2,000, then another for $4,000 and so on, until I'm tapped out.

You don't have to double up too many checks (10) before you get to the nosebleed level of a million bucks. Those 10 checks allow you to come up with an incredible 1,023 non-duplicated combinations, starting at $1,000 and going all the way up, in thousand dollar increments, to $1,023,000 dollars.

If you assign each check with a letter, say "A" on the $1,000 check and "B " on the $2,000 and "C" on the $4,000 and so on, then your last check would have the letter "J". Then make up a progression table of the 1,023 combinations and you're done.

When you win the bid just hand all your checks (folded once and tucked in a plastic pocket protector) to the auctioneer. He'll put it into his pocket and declare you the owner of the property.

Then while the auctioneer is going on to other sales just pull out your progression table and find the nearest combination that's just above your actual bid. Later, when the auctioneer comes to you with your receipt, pull out the appropriate lettered checks from the pocket protector and give them to her.

If you arrange your checks this way you will find that the maximum overbid you will ever be due will be something less than $1,000 dollars!

Make yourself the payee on your checks. Then if you're the winning bidder just endorse the checks over to the trustee. That way you can use the checks at any foreclosure auction you attend.

Since the checks are made payable to you, you won't have any hassle depositing them back into your account whenever you want.

A refinement on this approach is to make the checks payable to you or an alternate payee that you trust.

For example, I always have our checks made payable to me or my son (Ward or Eric Hanigan). That way Eric can go to a sale at the last minute if I can't, or perhaps go to another sale at the same time I'm attending a sale elsewhere. With the checks made payable to either of us we enjoy an extra flexibility that pays off surprisingly often.

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