Boston MA Bank Foreclosed Real Estate

Boston MA Bank Foreclosures

Boston MA bank owned foreclosures describe property the lender obtains after an unsuccessful foreclosure auction. The lender usually sells the real estate by direct sale or market their inventory through a Realtor. The lender is motivated to sell the property quickly and qualified buyers may benefit from an aggressive market price.

When a Boston homeowner defaults on their mortgage, the lender starts the process of obtaining the right to sell that property at auction in order to satisfy the debt (balance owed on the mortgage). This process will take a minimum of 75 days with substantial delays possible if the homeowner uses the law to their benefit. To obtain current bank owned and short sale listings go to Boston MA foreclosures.

Boston MA Short Sales

There are cases where a Boston MA homeowner will attempt to sell their home before the bank starts the foreclosure process. The homeowner is either already behind on their mortgage payments or will not be able to sell for a price that the net proceeds and additional resources would cover the balance owed on their mortgage. This is commonly referred to as a short-sale and requires the lender’s approval. Obtaining approval can be a long and frustrating process. Additionally, there is no assurance that the lender will accept any offer presented.

If the Boston homeowner is negotiating for a short sale under the HAFA program (Home Affordable Foreclosure Alternative) offered by the government, the process is streamlined and offers the lender, homeowner and potential buyer additional incentives. In this program, most of the barriers to a successful transaction have been removed.

MAForeclosure Law

In MA, non-judicial foreclosure is the most common method; judicial foreclosure is rarely used in MA. Lenders usually have a power of sale clause and must abide by stringent notice requirements. The bankruptcy court allows sales to be overturned if the amount of the sale was less than the market value of the property. For this reason, MA lenders proceed very carefully in foreclosing on a property, Review Massachusetts Foreclosure law for government legislation about MA foreclosures.

Buying Boston Massachusetts at Foreclosure Auction

For most consumers, purchasing at a foreclosure auction is a “risky” undertaking and, in most cases, buying from the lender after the auction is a better option. As a result, not many Boston MA foreclosure auctions end with the sale of the property. The lender takes back the title and possession of the property. The property is now “bank owned” and is often referred to as REO (real estate owned).

Boston MA Foreclosed or Bank Owned Real Estate

After a bank (lender, financial institution) takes possession of a property (after an unsuccessful auction), they mitigate items owed by the prior borrower, such as homeowner association fees. The financial institution also tries to get the IRS to remove any tax liens against the property. If the property is occupied, the lender will make arrangements for the owner or tenant to vacate by eviction or with financial incentives.The property is cleaned and minor repairs are made to the property. The lender wants to make it more attractive to potential buyers and maximize the value.

Banks want to sell foreclosed property quickly because they don’t want to tie up their money in capital reserves. Additionally, managing a foreclosed property may see further reductions in value and is a “headache”. Lenders that have significant REO inventory often have a separate department to manage their inventory.

Most lenders hire experienced Boston real estate agents to market their properties and list their inventory in the Multiple Listing Service (MLS) to ensure full market exposure. Bank owned listings compete with other available listings and buyers have the opportunity to inspect and investigate property prior to the final purchase. Lenders often market property “as is” which puts the potential buyer on notice as to the lender’s position on minor repairs.

Banks understand that they must conform to federal and state laws in regards to property disclosure. They usually state that they have no knowledge of the property and can make no representations as they have never occupied the property. Banks may or may not provide owner financing on their REOs but in most cases, this would apply only to property that was in very bad condition. A buyer is likely to obtain a better value for properties that need substantial repairs.

Buyers with accepted contracts have the option to conduct full home inspections even though the property is being sold “as is”. If major unknown material defects are found, the lender usually will negotiate to either a substantially lower price or make the repair.  Generally, negotiating with a lender is an easier process than negotiating with a homeowner. Lenders are typically unemotional about the process and are interested in making a “good business” decision for their stockholders. If a buyer is unreasonable in negotiating the lender will move on to the next potential buyer.

Consider all properties for sale as a Boston foreclosure isn’t always the best value for every buyer.

Negotiating a Contract for a Boston Property

Before making an offer, have your agent obtain all available disclosures and information on the property and ask questions such as: Are there any inspection reports? What work has the bank agreed to? Are there required bank addendums? How long does it take the bank to accept an offer? How does your agent deliver the offer?

Since lenders do not typically work on weekends and due to the volume of REO inventory, the negotiating process may take longer and create frustration for the buyer.
Make sure that your offer contains your “credit” approval which demonstrates your qualifications as a buyer as the lender is more motivated to negotiate with a qualified buyer.

Understand that lenders will sell at “fair” market value and do not expect “fire-sales” that you have seen of heard of in the media. As mentioned earlier, properties that need substantial structural and mechanical repairs will be negotiated aggressively There are fewer buyers qualified to buy these properties so lenders will offer greater discounts.

Virtual Homes real estate agents will provide you with a list of Boston MA foreclosures and bank owned real estate for sale. In addition, we can represent you as a Buyer’s agent and represent your interests in the property search, research, negotiations, home inspection and closing of the transaction.

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