Tip to save money on internet foreclosure services:
There are three foreclosure service companies I recommend, Bargain.com, Foreclosure.com, and Realty Trac. There are other companies as well, but they are not as complete or accurate. Some do not even show you preforeclosures and properties that have received notice of defualts.
With all these services, you can view foreclosure listings in the different stages of the foreclosure process free for one week by siging up for their services. They all provide about the same information. Try them all one week at a time to find the one you like best. After the free week trial period, these services do cost around $40 a month. On foreclosure.com, much of the information is free, and is often enough to help you identify defualt properties without paying for the service. You can even sign up to be on their email update foreclosure list. With the bargain network, when you call to cancel they offer to give you an entire year for the price of one month. You can get the full service, which in my opinion is the best of the online providers for just $40 for the entire year by just threatening to cancel.
There are several stages of the foreclosure process that present opportunites for home buyers and real estate investors to purchase foreclosure homes. Here is a brief run down of the steps to foreclosure, and how real estate investors can profit in each step:
Notice of Default
The pre-foreclosure stage begins when home owners receive a "notice of default", because they have missed mortgage payments. The owners still have an opportunity to make up the missing payments, or refinance with a FHA home loan. If the home owner cannot make up the missing payments, and the owners owe more than the homes market value, the home owner can often sell their house under "short sale status." Many investors step in and contact these owners directly offering to buy their house in order to prevent the foreclosure. This is a great time to step in as the investor competition will be minimal. Many distressed homeowners also list their homes in effort to save their equity. These homes are listed on the MLS. It is also possible to obtain Notice of Default Lists by subscribing to services like www.RealtyTrac.com. These services provide details, and many pictures of Utah Houses in all stages of the foreclosure process. They also provide picture and maps of the neighborhoods the foreclosure properties are in. You can usually view foreclosure listings free for one week.
When a house or condo 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.
Approximately 3 months after the notice of default, if nothing is done the defaulted borrower is sent a certified Notice of Trustee Sale. This notice tells the borrower that the house will foreclose at a trustee sale in four weeks if they do not pay the loan off.
Trustee's Sales
When the notice of trustees sale is given to a borrower in defalt, a date is set for the Trustee Sale. Trustee sales usually take place at the court house steps of the county seat. This is a public auction, and anybody may bid on the house to buy a house at a trustee sale you should know that:
You must 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 liens and judgements tied to the property. The properties might even still have residents needing eviction. Some liens such as second mortgages will sometimes be shafted.
The following Trustee sites will tell you when and where upcoming Utah Foreclosure auctions will be, these foreclosure auction sites are provided free of charge:
You can also find out about upcoming trustee sales for houses and condominiums by viewing the classifed sections of local newspapers. These listings are also free. If nobody purchases the house at the public auction, the property is purchased by the bank. It then becomes a bank owned or REO Property, and will most likely be listed by a Realtor and then sold.
Utah REO and HUD Homes
Bank owned homes and condos that were secured by Government Loans are known as HUD Homes. These repo's or 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.
Nationwide foreclosures are at an all time high. This is not the case in Utah. In fact the number of foreclosed homes was actually down in 2007 vs 2006. Northern Utah experienced rapid appreciation during this period, and this contributes to decreased foreclosures as equity was gained quicker and more borrowers in distress were able to change. For the 3rd quarter of 2007 forclosures in Utah were down 26%. Things can chang and many more houses will likely be repossessed in 2008.
Tax Lien - Tax Deed Foreclosure Sales
Many investors want to buy discounted foreclosure properties at Tax-Lien Sales. Technically these sales can exist, but I have never actually found or seen one. Most owners will redeem their deed before a tax sale ever occurs. There are several infommercials that talk about huge profits from Tax Deed Foreclosures. Most of these come from very rare and near impossible experiences. Really they just want you to purchase their "tax sale secrets" which will make them money, but likely won't profit you because they are so rare.
To be safe it is best to always ask advise of a good local Realtor. Some Utah Realtors even specialize in foreclosures. They can help you know the difference between realistic expectations, and real estate scams.
