In American Fork, there are different stages of the foreclosure process that present different opportunites and challenges for buyers and real estate investors to purchase foreclosured properties. According to RealtyTrac, there were 22 preforeclosure homes, and 23 foreclosed properties in American Fork at the beginning of the year.
Here is a brief summary of the different foreclosure stages, and how you as a buyer must go about finding and investing in American Fork foreclosures during the different stages of the foreclosure process..
American Fork Pre-Foreclosures
The pre-foreclosure stage begins when home owners receive a "notice of default". In American Fork, a notice of default is usually received after about four missed mortgage payments. The owners usually have about three months before the foreclosure auction to find a way to make up the missing payments and bring the loan current. However, usually they are monetarily unable to do such. If they had the money, they most likely wouldn't be in default.
Many American Fork preforeclosures are for sale and are listed on the MLS. However, the majority of them are not for sale. Many real estate investors attempt to contact these distressed owners, and offer to purchase their homes below market value to help them avoid foreclosure and preserve their credit.
Quite often the owners of the pre-foreclosure homes and condos are upside down. They owe more than the property is worth. It is still possible to purchase these homes. To help avoid foreclosure, banks will often times approve a "short sale." When a American Fork house is in short sale status, the bank forgives a portion of the debt and sells the home for less than what is owed. For banks, foreclosing is a very expensive process and they are often better off taking a "short sale" than foreclosing. Many American Fork short sale houses are listed on the MLS. They are noted with a special "SS" mark by the listing.
A foreclosure sale, or Trustee auction takes place a the County courthouse. This is a public auction where anyone may bid on the property if you:
Provide $5,000 certified funds prior to bidding.
Must pay off the entire purchase price in full within 24 hours.
Properties sold at the public auctions are sold without warranties. There still may be judgements tied to the property. The properties might even still have residents needing eviction.
Purchasing a property at a American Fork Trustee Sales can be fairly risky as a lot of the time these homes are purchased "site unseen." Sometimes the homes are on the market and investors can walk through them before the foreclosure auction, but often times they are not. When a distressed home has several loans on it the junior liens will usually get shafted. American Fork Foreclosure Auction homes can often be purchased at a large discount when there isn't a lot of competition.
American Fork Utah REO - Bank Owned Homes - Post Foreclosure homes
When nobody bids on a home at a public foreclosure auction, the lender bids on it for the amount owed. This becomes a Real Estate Owned (REO) or bank owned property. The large majority of the time American Fork REO homes end up listed with a Realtor and are found listed on the MLS. In the MLS notes look the owner will usually be listed as "REO" or "Bank Owned." Banks don't like carrying homes and so usually will price it low to try and sell within tree months. American Fork REO Homes are sold "as is."
One of the most common phrases associated with foreclosure, is HUD Homes. American Fork HUD Homes are Bank owned homes that were secured by Government back loans. New HUD homes become available every Friday in Utah. HUD homes can usually be purchased below market value, but they can usually only be purchased by people intendinding to use the property as their personal residence. If a HUD home is on the market for several weeks, the bidding is then opened up to Investors. Once its open to real estate investors, its usually not the greatest deal.
HUD Homes and Foreclosure Houses are usually in pretty beat up condition and require some rehabbing. Not all foreclosures are fixer uppers. Many distressed properties are newer and in very good physical condition.
The Latest Foreclosure News
There are basically 3 main areas of concern:
1. Chimney cap fasteners - inspector said these are coming loose and should be resealed - owner says he can do it - I don't know what's involved with doing that
2. Flashing coming away - inspector said this should be resealed - owner says he'll do it - I talked to a stucco co today that says they put an adhesive on it, then screw in the flashing - I don't know how the owner plans on fixing this, but I would think he may just want to caulk it, which I don't think is the right way
3. Some cracks/erosion/loose stucco on the south side base of the chimney - inspector said this probably would be okay for the winter - owner said there was some stucco repair done 2 months ago, he didn't say anything about fixing these new areas. Makes me wonder why if they just had a repair done 2 months ago that there is new stucco coming apart - did the company who did the work miss this part or is the whole chimney slowly falling apart?
