Foreclosures in Utah

[Daniel Howard]

I'm just starting out in real estate, and I'm looking through foreclosed homes in Utah. I was wondering if there was anything I needed to be aware of when buying a foreclosed home in Utah, and if there are any additional considerations when looking for a hard money lender to fund the deal.

[William Hochstedler]

Hi @Daniel Howard

Please specify what you mean when you are talking about buying foreclosed homes. I assume that you are looking at bank owned homes that have been repossessed through the process of foreclosure. In the industry these are called REO's for "real estate owned" (bank's perspective).

These properties will be listed and various types of financing will be available. Many banks do basic repairs so they qualify for at least conventional financing. All of these properties will be listed through an agent and most will be on the MLS. So the best way make offers on these is to hire an agent who understands what you are trying to do.

Foreclosures at the courthouse steps are another matter entirely.  This is the public auction sale that completes the foreclosure process and when title is actually transferred.  At this auction the bank will provide the trustee (attorney who is conducting the auction) with an opening bid.  This is the minimum amount the bank will take rather than repossessing and owning the property.  In this market, it is typically the outstanding balance on the loan.

In this process there is no due diligence and it may be difficult to even see the inside of the properties.  It is one of the riskiest ways to buy real estate and not for newbies.  But, at the same time, some real bargains can be had.

Here are some great BP resources to give you a baseline:

How to Buy a Foreclosure : The Comprehensive Guide to Buying a Foreclosed Home

Foreclosures 101: How the Process Works and How Investors Can Profit

THE FORECLOSURE PROCESS: UNDERSTANDING HOW FORECLOSURES WORK

BANK OWNED REO PROPERTIES AND REO LISTINGS

Welcome to BP!