So you want to buy a foreclosure in New England? Here is some information that you will want to know!

I have been getting a lot of inquiries lately about foreclosure properties listed on popular real estate websites for single family homes, condos, and all sorts of properties located in Massachusetts, New Hampshire, and Maine.  I’ve put together this short post with some important facts for buyers who are interested in foreclosure homes.  There are many different stages of the foreclosure process including the pre-foreclosure stage and the post foreclosure stage.

A property is listed as a pre-foreclosure.  What does this mean?  How can I buy a pre-foreclosure property?

Pre-foreclosures are listed on many websites when a lender commences the foreclosure process on a property for non-payment of the mortgage by the owner of the property.  However, this does not always mean that the homes is for sale.  I can help you buy a pre-foreclosure.  However, I would need your help and cooperation.  In order to help you buy a pre-foreclosure home we need to first identify and locate the owner and ask them if they are willing to sell their home.  This is the hardest step in buying a pre-foreclosure.  Identifying the owners is usually pretty easy by just looking in the public record.  However, locating the owners and getting them to agree to sell is the difficult part because many owners in foreclosure abandon their homes and move away or they don’t want to sell.  Most banks usually require a licensed real estate agent or attorney to assist with sales of pre-foreclosures.  If you locate an owner in pre-foreclosure for a property that you are interested in and want some help with buying the property.  Please contact me to discuss the next steps.

A property is listed as a foreclosure auction.  How can I buy at an auction?

Many banks choose to auction a property off to the highest bidder.  These auctions happen all the time and public notices can often be viewed in the local newspaper advertising these auctions.  Buying at an auction is not for everyone. Many seasoned investors attend auctions, often buying with cash and huge financial backers and resources at their disposal.  If you want to attend an auction and attempt to buy a property realize that many times you cannot see the inside of the property prior to bidding.

Sometimes there is a tennant or prior owner squatting in the property and if you purchase it you may need to evict them.  This can be an expensive process and there is always a risk that the tennant or squatter could damage the property before they leave.

The rules of every auction are different so you need to locate the auctioneer, determine the date, time, and location of the auction, find out the down payment requirements if you win the bid, and the rules on how long you have to close once you win the bid.  Be careful if you don’t have cash to buy an auctioned property.  If you need financing and the auction only allows you 2 weeks to close after winning the bid that could be an issue for you.  Also, if the property is not habitable you would need a rehab loan to purchase the property.  In my opinion, cash is best when buying at auctions.

You also need to be careful not to overpay for a property at auction especially if you don’t know the condition of the inside.  If the bank does not get a high enough bid at the auction they often times will buy the property at the auction and then sell the property on the open market.  Some banks are now rehabbing some of their properties prior to selling to decrease their losses.

Bank Owned Properties, A.K.A. REO Properties

There are many foreclosed properties owned by banks on the market, often listed with a real estate professional.  However, there are a lot of bank owned homes that are not currently for sale on the market.  I’ve been asked many times how to purchase such a property.  I’ve tried contacting banks about homes that they own that are not on the market yet.  It can be very difficult to get in touch with the correct asset manager at a bank and get them to respond to an offer.  If you are lucky enough to reach someone they may just direct you to their list of current properties available for sale.  If you have such a property in mind in Massachusetts, New Hampshire, or Maine let me know and I will create a property alert on my MLS account for you so you will know as soon as the property goes on the market.

Please contact me if you have any other questions about foreclosures.  Call/Text Chris Lefebvre at 978-835-1776.

Disclaimer: This post represents my opinions about the foreclosure process, but should not be constituted as legal advice. Please contact a competent real estate attorney if you have legal questions about buying a foreclosures.

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