What Happens if a Foreclosed Home Is Not Sold in Missouri?

If you’re a homeowner facing foreclosure in Missouri, you may be wondering what happens if your home doesn’t sell. Foreclosure can be a difficult and stressful process, and when a foreclosed home fails to sell at auction, it can have significant implications for both the lender and the former homeowner.

Below, we look at what happens to your foreclosed home if it doesn’t sell at auction in Missouri and how to sell your house to avoid foreclosure.

What Is the Foreclosure Process in Missouri?

Foreclosure is a legal process through which a lender attempts to recover their investment when a homeowner defaults on their mortgage payments. In Missouri, the foreclosure process follows a judicial foreclosure system, which means that it must go through the court system. Here is a breakdown of the foreclosure process in Missouri:

  • Notice of Sale: The lender must provide the homeowner with a notice of sale, indicating their intention to foreclose on the property. This notice typically includes information about the foreclosure auction and the date it will take place.
  • Foreclosure Auction: Following the notice of sale, a foreclosure auction is scheduled. The auction is held at the county courthouse, and the property is sold to the highest bidder.
  • Sheriff Sale: After the auction, if the property is sold, a sheriff sale is conducted. The winning bidder pays the purchase price, and the property is transferred to the new owner.
  • Deficiency Judgment: If the property is sold for less than the amount owed on the mortgage, the lender may pursue a deficiency judgment against the former homeowner to recoup the remaining balance.

What Happens at a Foreclosure Auction?

Foreclosure auctions in Missouri are conducted by the sheriff’s office at the county courthouse. Unlike some states where auctions are held on the property itself, in Missouri, they take place at a designated location. The auction is open to the public, and anyone can participate by submitting bids.

At the auction, the highest bidder will secure the sale. However, it’s important to note that the winning bidder must pay the full purchase price immediately in cash or certified funds. The winning bidder will receive a certificate of purchase, and if there are no legal challenges during the redemption period, the property will be transferred to their ownership.

What Happens if the Home Doesn’t Sell at Auction?

If a foreclosed home fails to sell at auction, it becomes a Real Estate Owned (REO) property. This means that the property reverts to the foreclosing lender, who then becomes the owner. The lender will have to decide what to do with the unsold property. Here are the lender’s next steps with an unsold property:

  • Assessing the Property: The lender will evaluate the property’s condition and market value to determine the best course of action.
  • Listing the Property: The lender may choose to list the property for sale through a real estate agent or an online platform.
  • Reducing the Price: If the property does not attract buyers at the initial list price, the lender may reduce the price to make it more appealing.
  • Selling As-Is: In some cases, the lender may sell the property “as-is” without making any repairs or renovations.

What Is the Impact of an REO Property on the Former Homeowner?

When a foreclosed home becomes an REO property, it can have several implications for the former homeowner. Here are some of the impacts:

  • Credit Score: The foreclosure and subsequent REO status will have a negative impact on the former homeowner’s credit score, making it more challenging to secure future loans or credit.
  • Loss of Home Equity: The homeowner loses any equity they had in the property since the lender takes ownership.
  • Deficiency Judgment: If the property was sold for less than the amount owed on the mortgage, the lender may pursue a deficiency judgment against the former homeowner, holding them responsible for the remaining balance.
  • Financial Hardship: The former homeowner may face financial hardship due to the loss of their home and potential legal consequences.

How Do Banks Handle REO Properties?

When a property becomes an REO, banks and lenders have specific protocols in place to manage these properties. They typically work with asset management companies or real estate agents specializing in the sale of REO properties. These professionals handle tasks such as property valuation, marketing, and negotiations with potential buyers. Banks aim to sell REO properties as quickly as possible to recoup their losses and minimize holding costs.

Cash Home Sale: An Alternative to Foreclosure

If you’re facing foreclosure in Missouri, a cash home sale can provide an alternative to the foreclosure process. A cash home sale involves selling your property directly to a real estate investor or a company that specializes in buying homes for cash. Here’s how it works:

A cash home sale is when a buyer purchases your property using cash, eliminating the need for traditional financing. By selling your home for cash, you can quickly settle your outstanding mortgage and avoid the foreclosure process altogether.

What Are the Benefits of a Cash Home Sale?

Opting for a cash home sale instead of going through foreclosure offers several benefits. Here are the key advantages:

  • Quick Sale: Cash home sales can be completed much faster than traditional sales, allowing you to resolve your financial situation promptly.
  • Avoided Foreclosure: A cash home sale enables you to avoid the damaging effects of foreclosure on your credit score and financial well-being.
  • Cash for Keys: In some cases, cash home buyers may offer additional incentives, such as cash for keys, which can help with moving expenses or finding a new place to live.
  • No Repair Costs: When selling your home for cash, you can sell it as-is, without the need for costly repairs or renovations.

Sell Your House Fast in St. Louis, Missouri

If you need to sell your house fast but don’t want the hassle of a traditional home sale, contact Klamen Real Estate Buyers. We buy houses as-is. No repairs are needed. Avoid closing costs and realtor commissions. Close in as little as seven days. Call 314-470-9713 and get a fast cash offer from our local home buyers in Missouri.