In Salt Lake City alone there are more than 1,000 properties in the preforeclosure stages. These are borrowers who have missed payments, received a notice of default, or have a Trustees Sale Scheduled. There are also about an additional 500 foreclosed, REO, HUD, and bank owned houses in SLC.
There are different stages of the foreclosure process where real estate investors and home buyers have opportunities to purchase foreclosed properties. When homeowners stop making payments, the lender has no choice but to foreclose on the property.
Below is a summary of the foreclosure stages, and how you as a buyer can find a Salt Lake City foreclosure deal.
Pre-Foreclosures in Salt Lake City
The foreclosure process can begin as soon as a home owner misses a mortgage payment. After three or four missed payments, banks will usually issue a "notice of default". The notice of default tells distressed homeowners that they are now responsible to pay the loan balance in full, or else the property will be sold as a foreclosure at a public auction. The owners usually have about an additional three months until the "notice of trustee sale" is issued and then another month before the foreclosure auction will take place. If you have received a notice of default, and would like a free consultation explaining your options and possible solutions click: Stop SLC Foreclosure
Many SLC 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. These homes can be found on sites like Foreclosure.com, Realty Store.com, and Realty Trac.
Short sales are a common segment in the Salt Lake City real estate market. A short sale occurs when a sellers home is not worth what they owe on it. Owners of these homes are behind on their payments. It is better for banks to release the lien for less than what is owed rather than execute the trustees sale. These properties need to sell quickly, and most lenders will settle for a fraction of the amount owed.
When a property is being sold as a short sale, the list price is normally low to get immediate offers. This asking price doesn't mean that the bank will actually consider the short sale.
Many lenders won't even consider a short sale file untill there is an offer Real estate agents price distressed homes low so they can get the process started. This doesn't necessarily mean that the price will be approved, and it often takes several months before the lender will even review the short sale packet. Short Sale listings can be filtered during a MLS search to specifically include short sale properties.
A foreclosure sale, foreclosure auction, or Trustee auction is the actual Foreclosure. In Salt Lake City, this auction takes place a the Salt Lake County courthouse 450 S. State Street Salt Lake City Utah. This is a public auction where anyone may bid on the property if they:
Provide $5,000 certified funds prior to bidding. An "official check" will not work.
Have the ability to pay off the entire purchase price by noon of the following day.
Are willing to take the risk of purchasing a properties without warranties express or implied. Houses for auction at the county courthouse may still have judgements tied to them.
Are willing to evict the current occupants. Many foreclosure properties still have residents needing eviction.
Purchasing a property at a Trustees Sale can be fairly risky. Some big investors purchase these distressed properties "site unseen." Many distressed properties are on the market before the auction but can not be sold in time. In these instances, investors can walk through them before the foreclosure auction, but often times they are not. When a distressed home has several loans against it, and the amount of the sale is not enough to satisfy all the liens the junior liens get shafted. Salt Lake City Foreclosure Auction homes can often be purchased at a large discount when there isn't a lot of competition. Homes with second loans are prime candidates for Trustee auction deals.
Salt Lake City Utah REO - Bank Owned Homes - Post Foreclosure homes
When nobody bids on a home at the public foreclosure auction, the property becomes becomes a Real Estate Owned (REO) or bank owned property. The large majority of the time Salt Lake City REO homes and Condos will be listed with a Realtor and are found listed on the MLS. In the MLS notes 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 three months. Salt Lake City REO Homes are sold "as is."
One of the most common phrases associated with foreclosure, is HUD Homes. Salt Lake City 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. The fact is, HUD homes are the hardest foreclosed homes to purchase as an investor.
I have an Associate Agent who is behind on her mortgage payments and wants to list her condo as a short sale. I've not run across this situation before and I'm unaware of whether or not the lender will pay her side of the commission if sold in a short sale. Has anyone run across this situation? Will the lender allow the Agent to receive a commission?
Sure a Realtor facing short sale can make a commission, as long as the transaction paid for is not the agents' house........ I just don't know how you could negotiate with the bank about the value of your house, shaft them in away, but then get expected to get paid on it. Even if one could get away with it its not ethical.
