A note from Marilee:

This post reflects my personal experience purchasing a foreclosure property in Utah and is not legal, financial, or real estate advice. Foreclosure rules, timelines, and costs vary by state, county, lender, and the specific property. For your situation, consult a licensed real estate professional, lender, and attorney.

We bought a foreclosure home in Utah, and what an experience that was! The whole process took about a year and a half. It was long and involved and full of surprises. If you are wondering how buying a foreclosure home works, then look at this list of things I learned while going through the process.

5 THINGS I LEARNED FROM BUYING A FORECLOSURE HOME

1. KNOW HOW THE HOUSE IS BEING SOLD: types of foreclosure properties that are sold

BANK-OWNED REO PROPERTIES LISTED ON THE MLS

REO: Real Estate Owned

MLS: Multiple Listing Service

• Properties that were foreclosed on by the bank.
• Properties that are listed on the MLS. This is the list of homes that you see on the internet, when you look at homes that are listed for sale.
• These foreclosure homes are usually sold like a traditional home sale.
• You may choose not to use your own real estate agent, although a licensed agent is typically involved on the seller’s side. Some properties require offers to be submitted through a licensed agent.
• The houses are usually sold “as is”. The seller typically makes no repairs.

BANK-OWNED REO PROPERTIES LISTED THROUGH A BROKERAGE COMPANY

• Properties that were foreclosed on by the bank.
• Properties are sold through a brokerage company.
• The sale is often handled through a licensed real estate agent.
• The houses are usually sold “as is”. The seller typically makes no repairs.

GOVERNMENT-OWNED HOMES: HUD, FANNIE MAE, FREDDIE MAC

• Offers usually have to be submitted through a licensed real estate agent.

FORECLOSURE AUCTIONS

• Properties are sold at a public auction. The auction usually takes place at a public location or office. The location will be designated in the foreclosure notice.

2. WHAT TO INCLUDE IN YOUR DUE DILIGENCE

Whether you are representing yourself or are going through a real estate agent, this is information you should find out about before putting in an offer or a bid.

• Are there lien issues that need to be addressed?
• Are there property line or easement issues?
• Are there title issues?
• Are there unpaid property taxes?
• How will liens, taxes, easements, and other recorded interests be handled in this sale? Check with a title company and/or an attorney so you are aware of what might remain attached to the property.
• If you are bidding on a home being sold at auction, what are the auction rules? These vary from state to state.
• What state laws do you need to be aware of? Foreclosure laws and procedures vary from state to state.

3. PREPARE FOR A SUCCESSFUL PURCHASE

If you are purchasing a foreclosure home through the MLS, or through the MLS and a brokerage company, or are purchasing a government-owned home, it will be similar to a traditional home purchase.

These things might vary:

• The earnest money may be due quickly, sometimes within 24 hours, depending on the seller and the terms of the offer.
• The percentage of earnest money required might be different than what you would expect.
• The closing dates might be different than what you would expect.
• The house will usually be sold “as is”. The seller typically makes no repairs.

The purchase of a foreclosure home that is sold at auction is different from these above-mentioned homes. We purchased our home through an auction. The best way I can explain how a foreclosure auction goes is to tell you about my experience.

This is what happened.

The house I was interested in had been in and out of foreclosure for a number of years. Because I wanted to relocate our family closer to where the kids were going to college, I had continually been checking house listings. Consequently, I had been keeping my eye on this particular home.

One night, I couldn’t sleep, so I pulled up the MLS listings and continued my search for a house to buy. The foreclosure home that I had been watching was back on the market. And this time, it was at a significantly reduced price.

At this point, Dutch woke up and asked me what I was doing. It was about 1:00 am. So, I showed him the house and asked him if we could afford to buy it. He said yes, and if I wanted to take on the project of trying to buy a foreclosure home, he was fine with that. Then he went back to sleep.

We had just purchased the home we were in about 8 months before. And we were still in the thick of fixing it up. So, I took on the project of seeing if I could purchase this foreclosure home. It was an adventure, and I was excited! Did I know what I was doing? Absolutely not!

In the morning, I got with a real estate agent, and the process began. And what a process it turned out to be! I did my due diligence, finding out about everything I possibly could that is listed in #2, above. I wrote down every financial question I could think of and took them all to a mortgage lender. I went through the house with the real estate agent and took pictures and notes of everything.

Like I said, the whole process took about a year and a half. First, the bank had me work with the homeowner in going through the purchasing process, because the foreclosure hadn’t been completed. That took some time and some doing.

Then, that all fell apart because the bank finished foreclosing. Once the house was vacant, which took some time, the bank put the house up for auction. And the auction was held on the front steps of an office building.

I went to the auction, which was early in the morning, several towns over, and I waited out front. The auction was opened to the public, so I was going to give it a try to see if I could get the house.

At the appointed time, someone came out and told us that the auction had been cancelled. We were told that the previous owner had filed some paperwork early that morning that paused the auction.

So, I thought it was all over. Several months later, there was the house again, on the MLS listings! It was back up for auction.

This time, the bank was going through a brokerage company. And the bidding had to be done through a licensed real estate agent. So, I called my agent, we talked numbers, and he knew how high he could bid for me. When the house went up for auction again, I was ready.

The auction lasted for a week. I didn’t win. But, it was a fun experience, and I learned a lot from it. I was a bit disappointed but not surprised.

However, the bank chose not to accept the highest bid at this time. Five minutes after the auction ended, the house was back up for auction. And this went on for 4 months. Each auction lasted a week, ending with the bank posting “Auction ended. Reserve not met.” Then, 5 minutes later, it would be back up for auction.

After 16 auctions, the bank finally said “Auction ended. Reserve met.” And I was still not the winner.

So, I called the real estate agent and asked him if I could make a counteroffer. The bids went in $10,000 increments, and I could bid one more time before going over my budget. The bank took my counteroffer, and no one else bid higher. So, I won the auction!

It was very exciting!

And this brings us to the next thing I learned.

4. KNOW WHAT TO EXPECT AFTER YOUR OFFER HAS BEEN ACCEPTED

If you purchase a foreclosure home through the MLS, or through the MLS and a brokerage company, or if you purchase a government-owned home, closing is still usually a lot like a traditional home purchase.

Once an offer is accepted and all required documents are signed and delivered/communicated (often called mutual acceptance), the agreement is typically binding. The timing and requirements vary by state and by seller. Some government-owned properties require additional paperwork.

These are the things you need to do:

• If you are selling your home, that sale needs to be finalized.
• You need to work out closing costs and dates for the foreclosure home.
• You need to meet with your mortgage lender and finalize your new mortgage.

If you purchased a home through an auction, what happens next is different than a traditional home purchase. And things happen in a hurry! This is what usually happens:

• Once the auction ends, and you are the winning bidder, you may be under a binding agreement, depending on the auction terms. Check the auction rules carefully.
• You will have a short amount of time, possibly as little as 24 hours, to come up with anywhere from 5-20% of the total price of the house (deposit/earnest money deposit as defined in the auction terms). Check the auction rules carefully.
• Closing can happen quickly, sometimes in just a few weeks.

Because I wasn’t ready for any of this, I think it would be helpful for me to continue the story and share my experience with you.

This is what happened next for me.

Because this whole process had been going on for 18 months, with the 2nd auction experience going on for 4 of those months, I didn’t really see an end in sight. So, when it finally came to its wonderful conclusion, in which I was the winner of the house, I wasn’t ready!

We had 24 hours to come up with a huge chunk of money, and Dutch didn’t know I was still bidding on the house. This project of mine had gone on for so long and had so many twists and turns, that I had stopped talking about it. So, when I told Dutch that I had won the auction for that foreclosure home, and when he got over being stunned, thunderstruck, gobsmacked, and astonished (and any other words you want to add from the thesaurus!), he jumped right in, and we got to work!

This is what we did:

• We gathered the necessary funds for the deposit.
• We put our house on the market.
• We started packing.

And then we had faith that everything would work out. And it did!

I have a neighbor that calls life’s trials “being in the middle of a miracle.” And when everything works out, you see the end of the miracle. This was true for us. I was in the middle of this home-buying-miracle for a long time. And then we saw the end of the miracle take place!

The auction ended on Wednesday, our counteroffer was accepted on Thursday, we put our house up for sale on Friday, we had an offer for it on Saturday, and we accepted the offer on Monday.

Truly, a miracle!

5. FINAL THINGS TO KEEP IN MIND

• Foreclosure homes are usually sold “as is”. The seller typically makes no repairs. So, as you walk through the home, take notes and take pictures. Take a measuring tape and measure areas that you might be questioning later. What needs to be done to the home to make it livable? What needs to be done immediately, and what can wait? And how long will these repairs take? Will you need to find a temporary place to live while these things are fixed? Or can you move in right away?

Our home had the water shut off. There was extensive water damage throughout. We fixed bathrooms the day we moved in.

• Refer back to your notes and pictures so you can start making plans of what renovating and remodeling needs to be done to the home. What light fixtures need to be replaced? What rooms were designed for lamps only? What rooms had carpet, wood flooring, laminate, tile? And what of that are you going to replace? What shape was bathroom and kitchen hardware in? What rooms are you going to paint or wallpaper? Are you going to knock out walls or build walls? Are you going to start immediately with kitchen, bathroom, mudroom, laundry room overhauling?

Start making lists of what you plan to do and what you plan to buy. This is where your measurements will come in handy. You will know if that sectional couch will fit where you are planning, if the king-sized bed will fit in the guest room, etc.

I had an old wooden French provincial curved desk that I was going to turn into a vanity. And I knew that it would fit in the little nook in the master bathroom.

I had also been experimenting with paint colors for a while. I had taken night stands, bookcases, and end tables, and children’s rocking chairs, cribs, and high chairs, and anything I could get my hands on, and painted them all. I was able to look at different paint colors on different surfaces, at different angles, in different rooms, and at different times of the day. So, I knew what the colors looked like in direct sunlight, in shade, and in darker rooms. By the time we moved into our home, I had a complete color palette worked out.

• Choose a design style for your home. Ensure that it fits with the architectural style of your home. This will narrow down your choices, which will make the renovating and remodeling process easier.

I had chosen French Normandy as the design style for our home. That made it easy to choose all the hardware we were replacing: light fixtures, bathroom and kitchen hardware, door knobs, etc. And it simplified our choices for wood flooring and stain colors, tile shapes and colors, area rugs, doors, etc.

And, yes, our home does look a little bit like Gaston, from Beauty & The Beast, lives here. And I love it!

• If you need to sell your home, make sure that it’s ready to go on the market at a moment’s notice. You will most likely need to sell your home in a hurry. Let people know that you are thinking of selling. Keep a list of anyone who might be interested in buying. Consider packing up what you can live without and storing it somewhere, maybe in your garage. This will make moving in a hurry easier. It will also help your house to look more sellable.

• Know where the money is going to come from for the deposit if you win an auctioned home. Don’t get caught by surprise!

• Take note of what shape the foreclosure home is in. What type of cleaning will it need? If it has sat empty for a while, it might need a good cleaning. If it has suffered neglect, it might need a deep cleaning.

We cleaned carpets and walls before we moved in, even though we knew we would soon be taking out all of the carpet. Some of us were packing, and some of us were cleaning. Make the house livable, so it’s lovable.

• If there’s a gap between the closing date of your former home and your new home, have a plan in place for accommodations. Can you work things out with the people that are buying your house, so that it’s a smooth transition? Do you have family that you can stay with? Can you rent a hotel? What about a campground, if it’s summertime?

We looked into taking our camper-school bus to a campground. But, we were able to work things out with the people who bought our house, so there was no gap.

Thanks for taking the time to read about my experiences and my suggestions. Buying a foreclosure home can be a way to purchase property at a lower price. Especially if you are prepared to take on repairs and renovation. And, if you are ready for uncertainty.

As always, make sure you get advice from licensed realtors, mortgage lenders, and legal advisors. My experiences will not be the same as yours. So, be sure to consult with professionals for guidance.

I’m so glad that we had the opportunity to buy this home! It was an adventure and a great experience. If this is something you are considering, do your research and speak with licensed professionals to determine if it’s right for you. Our family has learned new skills, and we have learned to work together. And we have created a home that is uniquely ours. And I hope that you can create a home that feels uniquely yours, too!

Crafting wishes,

Marilee

If you are looking for property in Utah and are looking for a real estate agent, I highly recommend Justin Crane. He is a licensed real estate agent, and we were fortunate to have his help and expertise as we navigated our way through the purchase of our foreclosure home and the sale of the home we were currently living in.

Justin Crane

CLICK HERE

CENTURY 21, Justin Crane

This agent is a REALTOR®, a member of the National Association of REALTORS®. 

Justin was knowledgeable, capable, and so positive and supportive. When others told me that I would never get this foreclosure home, Justin kept pressing forward. He stayed on top of every auction, answering every question and addressing every concern that I had along the way. He anticipated our need to sell our current home when we won the auction, and was right there helping us with the next steps. He used time efficiently and effectively, with sending texts, setting up appointments, and answering his phone. I never felt like time was wasted.

Justin knows the business. He knows how to work through complicated transactions. He is a friendly and hardworking licensed real estate agent, and I highly recommend him for any of your property needs.

I am sharing this recommendation based on my personal experience. I am not being paid for this referral.

After subscribing, click here to receive free 2026 monthly calendars:

2026 Monthly Calendars-A Crafting Home Giveaway