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Foreclosures – REOs
Some Saint George, Utah Homes Become REOs
An REO (or Real Estate Owned) property ends up back in the hands (ownership) of the mortgage company (or bank) upon the unsuccessful attempt to get rid of the property at a foreclosure auction. Have you ever attended one of these? Typically, they are conducted, literally, on the court house steps in your city. And, almost all properties at these auctions are bought by the bank, because most properties get zero bids!
This does make sense if you think about it. If there was enough equity in the property to pay off the loan, the owner would have probably sold the property and satisfied his lender. So, the property ended up at the trustee (foreclosure) auction and the bank bought it back, basically from themselves.
So, there you are, at the auction, and hardly anyone is bidding, if at all. The mandatory opening bid will include the loan balance, any liens against the property, attorney fees, accrued HOA dues, property taxes in arrears, and whatever else might come with the property as 'baggage'. It hardly makes sense to even attend one of these auctions. Not only that, but you get to buy the real estate "as is", and you will need to have a cashiers check in your pocket made out in the amount you are expecting to pay for the property if you are the successful bidder (in Saint George, Utah you normally need a cashiers check in the amount of $5,000, which you deposit with the auctioneer; then, you have 24 hours to come up with the remainder of the funds to buy the property).
So, now we're finally heading down the track to an official REO. What is owed the bank is almost always more than the property is actually worth, so the property reverts back to the original lender. Thus, the term 'Real Estate Owned', or REO.
Attend a Real Estate Auction at the Saint George, Utah Courthouse for an Education
The next time you are searching for Saint George, Utah real estate and you come across an REO, you will know what that piece of property went through to gain its dubious status! It went through the ringer and back! But, all is not lost, my friends. Just because the bank now owns that Saint George home doesn't mean you can't buy it and make a tremendous deal. Read the accompanying article on how to buy an REO and you'll see what we mean.