Re-Think Your Strategy
“I have heard you can buy Utah pre-foreclosure homes for a good price. Where can I find a pre-foreclosure home for sale and how can I buy one?”
This question is actually a very common one. The short answer is, “You probably can’t, unless you negotiate directly with the home owner.” The long answer is, there are many instances when home owners decide to sell their homes to avoid the foreclosure process. Sometimes they can negotiate with the lender to sell a home as a short sale property. Only at that point are pre-foreclosure homes for sale. Lenders must follow very strict guidelines outlined by Utah foreclosure laws.
America’s housing crisis is beginning to wind down and there is still a healthy inventory of foreclosure, REO, bank-owned and short-sale homes for sale. Major real estate websites are becoming more and more popular as people flock to them to browse through hundreds of foreclosure and pre-foreclosure listings.
Many major real estate websites mine information from public records. It’s a way to get a sneak peek at what might be coming on the market; however, it is not necessarily a reflection of the homes that are immediately for sale (or even a guarantee that they will be for sale in the near future).
It is no secret that many Americans have fallen on hard times in recent years. An economic downfall of epic proportions has caused people to lose jobs, businesses to shut down, the cost of goods to increase and a host of other problems that can impact a homeowner’s ability to pay the mortgage.
When a Utah borrower becomes two, three or four months behind in payments, Utah lenders will generally take a non-judicial approach to collecting. The first step in this process in Utah is the service of a 'Notice of Default.' This is a legal document and it becomes a part of the public record. Anyone has access to public records. Some major real estate websites obtain and publish records specific to Utah homes. Once a Notice of Default is served, home owners enter a phase called pre-foreclosure.
The homeowner has three months from the time the Notice of Default is served to make satisfactory payment arrangements or sell the home. After three months, the foreclosure trustee/attorney can sell that property at a public auction usually held at the county courthouse in which the home is located. A 'Notice of Sale' must be published no less than 10 days before the sale is scheduled. If the lender is not satisfied, the home can be sold at auction.
Borrowers in Default Have Options
Borrowers do have other options; for example, a borrower can negotiate with his or her mortgage lender to sell a home through a short sale (the bank accepts less than is actually owed on the home to avoid the costly foreclosure process). This must be done with professional industry representatives and does not happen in all pre-foreclosure cases. Another obvious option is to catch up on past-due payments to a lender’s satisfaction. A seller might also opt to try to sell the home outright before the three month deadline is up.
When a home does become available as a short sale, that home listing will be clearly marked as such and the home will be listed on a Multiple Listing Service (MLS). We use the Wasatch Front Regional Multiple Listing Service (WFR-MLS) and the Park City Multiple Listing Service (PC-MLS) as our main resources.
The bottom line here is that Realtors do not generally get involved as buyers’ agents until:
1. The home is listed for sale on the MLS as a short sale
2. The home is listed for sale in an attempt to thwart foreclosure without a short sale (there is not usually much savings opportunity here unless the seller has significant equity in the home).
3. A home is foreclosed by the lender, sold at auction and then re-listed on the MLS. In this case, the home is no longer a pre-foreclosure, but a foreclosure or foreclosed home.
You are likely to see many pre-foreclosure homes on major real estate websites. When you do:
1. Ask your local realtor to check the MLS to see if the home has been formally listed for sale.
2. Look at the date when a Notice of Default was delivered. If the date was eight months, a year or several years in the past, a pending listing is not likely.
3. Realize that public notices are published, but the results rarely are. The delivery of a “Notice of Default” may be made public, but an owner’s success in saving his or her home probably will not.
For a list of Utah foreclosure homes that are for sale, please visit
www.allutahhomes.com. Our Utah foreclosure page lists actual foreclosure, REO, bank-owned, HUD and short sale Utah homes that are actually for sale.
Utah Real Estate Can Help
If you have questions about the
Utah foreclosure process,
please contact Joel Carson, Utah Real Estate, at 801-673-3333 or 801-455-5555.
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