Newton MassachusettsForeclosures and Bank Owned Real Estate
Newton MA bank owned foreclosures describe property the lender obtains after an unsuccessful foreclosure auction. The lender usually sells the property by direct sale or market their inventory through a Realtor. Buyers often benefit by purchasing Newton MA foreclosures as the lender’s interest is to dispose of the asset quickly and aggressively price them to reflect market conditions.
The foreclosure process begins when the homeowner defaults on their mortgage. The first step for the lienholder (s) is to obtain the right to sell at auction. In Massachusetts, this process takes a minimum of 75-90 days and if the homeowner contests the process in court or files bankruptcy the delay can be significant. To obtain current bank owned and short sale listings go to Newton MA foreclosures. You will receive updates of new foreclosures as they come on the market.
Newton MA Short Sales
There are instances where a Newton MA homeowner will attempt to sell their home before the bankbegins foreclosure proceedings. 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 an offer at or above the listed price or any viable contract presented.
In Massachusetts, 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 Newton MA Homes at Foreclosure Auction
For most potential buyers, purchasing at a foreclosure auction is a “risky” undertaking and, in most cases, they will opt to purchase from the lender after the auction. Experienced investors understand the process and may have success in taking the risk. As a result, not many Newton MA foreclosure auctions end with a bidder being successful with an accepted offer. The title reverts back to the financial institution holding the lien. These properties are referred to as REO (Real Estate Owned) or Bank Owned properties.
Newton Bank Owned or Foreclosed 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 lender also tries to get the IRS to remove any tax liens against the property. The current owners are usually evicted or provided financial incentives to vacate.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.
Lenders want to move their foreclosed assets quickly as maintaining REO inventory is a costly process. Additionally, managing a foreclosed property may see further reductions in value and is a “headache”. Some banks have experience in managing REOs and foreclosures and often have a department dedicated to them.
In most cases, the lender will list their foreclosures with Newton real estate agents who market and manage the property. Buyers have the opportunity to view, investigate and inspect the property prior to final agreement to purchase. Some lenders will negotiate repairs and concessions, but in most cases their preference is to sell “as is” at a “discounted price”.
State and Federal requirements regarding property disclosure must be followed by lenders. They usually disclose 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 problems 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 the company. It is not in a buyer’s best interest to attempt to renegotiate a contract over trivial items that were disclosed or obvious prior to negotiation of the contract.
Consider all properties for sale as a Newton foreclosure isn’t always the best value for every buyer.
Making an Offer on a Newton Property
Before making an offer, have your agent contact the listing agent and ask typical questions you would ask of any seller and some additional ones such as: Are there any inspection reports? What work has the bank agreed to? Is there a special “as is” form?How quickly will the lender respond?How is the offer negotiated?
The negotiating process can be very frustrating for buyers as the typical timelines do not apply and understand that lenders do not work on weekends.
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.
Do not expect lenders to “give away” property as they understand what the property should sell for in the marketplace. As mentioned earlier, properties that need substantial structural and mechanical repairs will be negotiated aggressively There are fewer qualified buyers for these properties so lenders will offer greater discounts.
Virtual Homes real estate agents will assist you in the purchase of Newton 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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