Massachusetts Real Estate

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Buying a Foreclosed Home or Potential Foreclosure Property

                                                                                                                                                    Foreclosed homes in Massachusetts

Are you considering buying a foreclosed property? Why not after all there are plenty of them all around the country and they can typically be bought at a discount to the present market value.

Buying a foreclosed home however, is not for the timid at heart and there are many things that buyers need to consider. If you have ever watched a late night infomercial you would think buying a foreclosed home can be bought for 50 cents on the dollar and immediately re-sold for a boat load on money. Don't plan on it!

Foreclosed homes generally can be purchased anywhere from 5%-20% below the current market value. Along with the chance for immediate equity comes a lot more risk. As a buyer of a foreclosed home you need to prepare yourself for a significant amount of due diligence.

As a twenty three year veteran to the Real Estate industry, I would highly recommend having an attorney represent your interests. One of the 1st things an attorney will do is a title search to see if there are any liens or other liabilities on the property. Things like unpaid taxes, mechanics lines, or court judgments are all possible land mines. The sooner you determine the legal status of the property the better as this will help determine if it is worth it to put in an offer.

The last thing you want to have happen is to think you just bought a home for $400,000 but then find out there is $75,000 worth of liens on the property.

Foreclosed homes in Metrowest MassachusettsHaving your financing already lined up is a very important consideration as well because these kind of transactions tend to move very swiftly.

Unlike a traditional Real Estate transaction everything is "buyer beware". You will be buying a home in many cases in "as is" condition. In many cases a person who has lost their home because of financial difficulties probably has not had the funds to keep up with the maintenance.

There could be any number of problems that are not readily apparent. Issues with some of the more expensive components of a home such as heating, plumbing and electrical systems are all possible. Don't be surprised if there has been vandalism by the previous home owner or other vandals either.

I have gone in plenty of foreclosed homes where the owner has taken out their anger on the home. I have been in homes where the entire kitchen was removed. Some of the other more common issues today is the copper plumbing being taken out of a home. I know that may sound crazy but it happens!

Still interested in buying a foreclosed home? Here are the three scenarios when buying one:

  • A pre-foreclosure where you buy directly from the home owner before the bank takes over.
  • At an auction where you may be in competition with other buyers.
  • From a Real Estate company or the bank itself. This is known as an REO aka Real Estate owned.

In a pre-foreclosure you get to do all your various due diligence including any home inspections and a title search to make sure there are no liens. In a pre-foreclosure the owner signs over the deed to you and you take title to the property. In this scenario you acquire the mortgage a must bring it current giving the bank any missed payments.                                                                                                                     Buying a home at auction in Massachusetts

Buying at an auction typically carries the most risk but also can come with the greatest reward. Auctions are handled differently from state to state. Some are held right at the property and others at the local court house.

Many times with an auction you are not allowed to inspect the property prior to the scheduled auction date. These types of sales tend to bring out more "investor" types as these properties can be bought on many occasions for a price that could warrant a "flip" where the buyer turns around and re-sells the property.

A buyer going to an auction will need to come up with a good size deposit and will be expected to show they have the ability to complete the purchase.

The REO scenario is usually the least risky as the bank has acquired the property and has wiped out the liens through purchase. Once a home is Real Estate owned many banks will list these homes with a Realtor. The buyer gets clear title, is most often allowed to inspect the home, and is allowed to have a mortgage contingency.

A few other very important considerations in the foreclosure process in the "pre-foreclosure period" and the "redemption period".

Selling a home at auction in MassachusettsThe pre-foreclosure period is the time between a previous owner's notification of default and the point when the property can be sold by the lender.

This time period is also when the existing owner can make good on the note and keep their home, or sell it themselves. So the shorter the pre-foreclosure period, the more advantageous it is for the new buyer.

The redemption period is the time when the previous owner is allowed to buy back the home after the lender has sold it. Again, the shorter this time period, the better it is for the buyer.

Some states have no redemption period, making it an optimal situation for someone to purchase.

These time periods vary depending on the State the property is located in. Knowing the exact redemption period is critical because you could end up losing time and money if the previous owner ends up taking back the home.

Most of your efficiency as a buyer depends on whether the state in which the property is purchased uses mortgages or deeds of trust for real estate transactions.

When a state uses mortgages, it means they also conduct their foreclosure proceedings through the courts. These transactions tend to take longer and have a range of potential problems. When a state uses deeds of trust, the foreclosures are non-judicial and tend to resolve quicker and with far less head aches.            Foreclosure help in Massachusetts

In Massachusetts the primary means on foreclosure is non judicial (no court action). If the deed of trust, however, does not contain a power of sale language,(language in the mortgage that allows the mortgagee to sell the property) the lender may seek judicial foreclosure.

As few as 75 days may pass from the time a property owner receives a notice of default until the property is sold at a public foreclosure auction sale.

As you can see there is quite a bit to know when buying a foreclosed home. In addition to having a good attorney a knowledgeable local Realtor can be very important as well in helping to determine the market value.

If you are a Massachusetts home owner and have come across this article and may be potentially facing a foreclosure there are options to avoid this potential situation. See this avoiding Massachusetts foreclosure resource.

There are other options to avoid a foreclosure including a short sale which I have been successfully doing in the Metrowest massachusetts area. Here are a few articles worth reading:

Foreclosure avoiding it through a short sale or loan modification

Short sales and deed in lieu of foreclosure

Buying a Massachusetts foreclosure

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About the Author: The above Real Estate information on Buying a foreclosed homeRE/MAX Executive Realty Hopkinton Massachusetts was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest MA Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

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Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comment balloon 94 commentsBill Gassett • March 23 2009 08:24AM

Comments

Very good and much needed Bill. As you know, but your readers may not, any lender or mortgage broker where a buyer is pre-qualified should be happy to place a title order on behalf of a buyer with the attorney who will be handling the closing. As you indicated this is a highly valuable step and the lender is going to want that clear title, too.

Posted by Ken Cook, Content Marketer/Creator (Content, coding, marketing, host.) about 10 years ago

Bill, Last summer an investor client of mine purchased a home at auction. Title transferred.  A few days later my investor received a call from the seller's attorney telling him to "cease and desist" going to the property as the seller had filed bankruptcy in federal court before the deadline for the sherrif's sale and the sale was going to be vacated. Yikes! This was a first for me but I guess the important thing here for the seller was that he filed in federal court. This was the part that was missed by the title company for the sheriff's office. Lucky for my investor that our owner knew the judge and he got his money back within days, but weeks later it was still in his name and he received a bill for his "delinquent taxes" What a mess...but straightened out eventually. Don't think he's interested in anymore auction houses.

Posted by Barb Szabo, CRS, E-pro Realtor, Cleveland Ohio Homes (RE/MAX Trinity Brecksville Ohio) about 10 years ago

Novation Mortgage - Knowing that you have clear title is invaluable. Having the pro's working hand in hand with you in this type of Real Estate transaction is well worth it.

Barb - I am sure there are lots of horror stories like this with homes at an auction. It is a good thing that this was discovered right away and not further down the road when the buyer has invested more time and money on the property.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

You are right, there are a lot more risks buying the unknown, and that is what an REO property is.  Even if it just was foreclosed on last week and the sellers disclosure was included in the attempt to sell it, the new agent does not present the disclosure.  At least you would know something...

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) about 10 years ago

Evelyn - REO properties do have more risk especially prior to becoming REO'S at an auction. You really need to do your home work.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill thats a very informative post, I think many folks would benefit from reading this... foreclosurers and auctions may be money saving but like the midnight informercials make it sound. Due diligence is the word of the day in foreclosures.

Posted by South Austin Real Estate Blog (Sky Realty South Austin) about 10 years ago

Bill,

You are so right, buying a foreclosed, pre-foreclosure or REO property is not for the weak of heart.  I am still trying to figure out where the late night infomercials get off telling folks that you can buy a home for fifty cents on the dollar.

Posted by Don Rogers, Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes (Keller Williams Realty Chesterfield) about 10 years ago

Gail & Don - I have always been amused by those commercials. Don't they always show the sales pitch with the guy sitting under a bunch of palm trees because he is now a millionaire? If only things were that easy in life. Sure there are plenty of properties that you can make some decent money on. You do need to take extra precaution, however when buying a pre-foreclosure and even one that has already been foreclosed.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

this was an amazing post!  a LARGE percent of the offers I am writing right now are on foreclosures, I am going to have my buyers read this and have reblogged it!  thank you so much for such a detailed explanation of the obstacles to look out for!

Posted by Janie Coffey, Uniting Extraordinary Homes w/ Extraordinary Lives (First Coast Sotheby’s International Realty) about 10 years ago

Your presentation of facts and ideas is excellent, Bill, and most beneficial for those considering diving into the deeper waters of foreclosures. It's been the toughest arena for me as a professional, too. Selling foreclosures is not for the faint of heart either. I've had to really suck it up and roll up my sleeves and ask a ton of questions. It just feels like a wounded battlefield to me and I struggle with the demands and the imbalances on several levels. Short sales I can handle much better. Where do you learn all this? It's very impressive. Knowledge is power... and you're clearly the best!

Posted by Mara Hawks, Inactive-2012 REALTOR - Homes for Sale Auburn Real Estate, AL (First Realty Auburn ) about 10 years ago

p.s. - can I re-blog this?? :-)

Posted by Mara Hawks, Inactive-2012 REALTOR - Homes for Sale Auburn Real Estate, AL (First Realty Auburn ) about 10 years ago

Janie - Thanks. This is actually one of my favorite articles I have written to date. Of course the subject matter is really close to home for all of us Realtors that deal with foreclosures on a weelly basis. Thanks for re-blogging.

Mara - Thank you very much. I spent of lot of time of this article as you can see. Foreclosures are not for the faint of heart. There is a lot to know and precautions to take when considering buying one. I always highly recommend a good attorney whenever I am representing a buyer in the purchase of a foreclosed home.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Mara - Of course you can. Be my guest and thanks again!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill - This is very consise. I don't need to reinvent the wheel as I will place this post in front of my buyers who have interest in these types of properties. Good job. Looks like a possible re-blog.

Posted by Claude Cross, Charlotte NC Homes For Sale (Homes By Cross, Inc. ) about 10 years ago

Claude - Thanks. I am glad you found my article about buying a foreclosure property worthwhile for your readers.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill- this is a great post and well needed in this economy. You have written a very concise explanation here of what to expect when buying foreclosure properties. I think I would like to reblog this as well. May I? I know of a few people that need to see this that are not on A/R. Thanks in advance.

Posted by Robert Hammerstein, Bergen County NJ Real Estate (Keller Williams Valley Realty) about 10 years ago

Bill , we all have war Stories about when a perceived great deal doesn't live up to the billing. Short example, I registered a buyer for an Auction recently, the successful bidder paid nearly market value for the condo, then was told they were responsible for both sides of the closing costs (which added $1,500 in transfer tax) plus back taxes, and the repairs for an as is sale. The buyer ended up paying more than a resale and had work to do. Great Deal...I don't think so! (P.S. I talk my guy out of the purchase when I saw the place,repairs and added costs)

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 10 years ago

Bill this is a great post.  Buyers really need to open their eyes to the realities of what is involved in the real world for these properties.

Posted by Jim Crawford, Jim Crawford Atlanta Best Listing Agents & REALTOR (Crye-Leike REALTORS®) about 10 years ago

Bob - Thanks. I spent a lot of time writing this one. You are more than welcome to re-blog it. Unfortunately there are a lot of foreclosures that have not even hit the market yet according to Realty Trac.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Steve & Jim - It is funny how everyone automatically assumes foreclosures are the bargain of all bargains. In many cases they are not. You have to be real careful about finding out what fees you will be responsible for.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

I reblogged you too - I'd rather you said it!! And you said it so well - thanks for a great post!

Posted by Dawn Maloney, 330-990-4236 Hudson & Northeastern Ohio (RE/MAX Trinity Northeast Ohio Real Estate Specialist) about 10 years ago

Bill - Buyers definitely need the education and knowledge when they are buying a foreclosure or REO home.  Your post has covered everything they need to know.  I am so cautious when I'm working with buyers who are looking to purchase these homes and take the time to inform them of all of the obstacles they might run up against in the process.

Posted by Julie Dumaine-Russell (RE/MAX Alliance) about 10 years ago

Great well thought out post.  I too believe  many people do not know what they are getting into when purchasing a bank owned property especially at auction.  If you purchase a bank owned property not through auction in my experience they require an addendum to the contract clarifying if you do not catch any defects or liens prior to close you will not be able to come eafter the bank for anything.  Definitely like you said "Buyer Beware" 

Posted by Highland Beach Condos David Serle, Boca Raton Agent David Serle (RE/MAX Services) about 10 years ago

Bill - Great, well organized and thought out post. I just love it. I need to write something similar as it pertains to our market.

Posted by Christianne O'Malley, Exceptional Service - Delivering Results in Reno! (RE/MAX Realty Affiliates) about 10 years ago

As a general rule I find you an get a better buy from the bank after the foreclosure... safer too ;)

 

Posted by J Perrin Cornell, Broker, ABR, VAMRES (Century 21 Exclusively, Wenatchee, WA) about 10 years ago

Thank you for the informative post today. This is a good read for me and for buyers.

Portsmouth NH Real Estate

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) about 10 years ago

I prefer using a title insurance company over and attorney, mainly becasue the title insurance companies in our area, are much better than any of the attorneys.  I'm guessing that may not be true nationwide.  I've been licensed since December of 2008 and have already delt with 3 bank-owned properties that were a result of foreclosure.  What a great way to get "broken in"

Posted by Kristen Hall, REALTOR, Shippensburg Real Estate (Jalex Real Estate Services) about 10 years ago

Dave - Educating buyers on the purchase of a foreclosure is so critical. There are so many buyers that just think of these properties as the bargain of a lifetime when in fact many of them just are loaded with problems.

Perrin - There is no doubt they are safer after the bank has taken the property over as they will be selling the property with a clear title. My experience is that you will get a better deal at an auction because once the bank owns it they have additional costs such as commission.

Kristin - Wow talk about jumping into the fire. Good for you. I think it is great to learn Real Estate with a tough transaction. Foreclosures certainly have many more potential pitfalls to deal with. Best of luck to you in your business.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill, This is a wonderful post.  It IS confusing about what you need for forclosures and short sales and sometimes difficult to understand the benefits and the risks.  I love that you write to the CONSUMER so we can all understand this information!

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) about 10 years ago

Morning Bill!  What a great post!  We will definitely keep this one for further reference.  I seriously doubt that many who buy foreclosures realize the risk involved and the things that can go wrong.  Our first obligation for buyers looking at these properties is to educate them or help them find the information they need.  Thanks again! 

Posted by Bruce & Mary Smith, REALTORS, Savannah Lakes Village McCormick SC (Savannah Lakes Homes) about 10 years ago

Hi Bill, this is great info. There are so many things to consider and so many people assume that the bank owned property, short sale or auction home is a great deal. Having an expert (like yourself) at hand is so important. Many times these properties get bid up or are just full of headaches! Those informercials make everything seem so easy! :o)

Posted by Cristal Drake, Realtor - Fullerton Real Estate (Prudential California Realty) about 10 years ago

Great post with great info...I am reblogging.

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty) about 10 years ago

Bill ~ So many people get excited about the prospect of buying a foreclosure, until they actually see what these homes look like!  Most take so much work, much more than the slight discount in the price warrants.  It is ashame how some homeowners take their anger out on the home. I've seen some that were beyond recognition.

kk

Posted by Kristal Kraft, Selling Metro Denver Real Estate - 303-589-2022 (The Berkshire Group Realtors) about 10 years ago

Carole, Bruce Cristal - I am sure there are many buyers that do not consider the potential pitfalls with a bank foreclosure. Some of these properties are great deals, others not so much. Giving out clients all the facts so they can make an informed decision is important.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Thanks for the info...I have had several buyer purchase property's after the bank has taken over, and so far so good. Is this scenario something you ever worry about, or as you said in the post, at this point the title is clear.

Are you more concerned about Short Sales?

Thanks

Posted by Stephanie Feinzilberg (Remax Services) about 10 years ago

Kristal - So very true. I have been in a few foreclosures that are an absolute disaster. I do have one under contract at the moment that is very nice though. The home is under ten years old and is in pretty decent shape. Although the home was not winterized properly and we have had to get a few leaking pipes fixed. Overall the buyer is getting a pretty good deal.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Stephanie - Once the home is banked owned and someone is marketing it, there is almost always a clear title in my experience. Short sales are a completely different story. Getting a clear understanding up front is important whether you are representing a buyer or a seller.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill-Great blog and awesome content! You rock with your well written anatomy of foreclosed homes! I just ran into a couple at my open house yesterday that purchase a home (fisbo) land contract only to have someone knock on  the door a few weeks later to evict because the home had been foreclosed nice one huh? Best to you~

Posted by Mary Kent, Grand Rapids to the Lake Shore (Five Star Real Estate ) about 10 years ago

Hi Bill: This is a very informative article for people considering buying a foreclosure. You did a great job explaining the differences between a short sale, foreclosure and REO property. Buying a foreclosed home can be a lot of work--it's not as easy as buying the property and flipping it--most of these homes are in pretty bad shape. Excellent post!

Have a great day,

Anne Rains

Posted by The Rains Team, A higher standard in real estate (Keller Williams Realty Atlanta Partners) about 10 years ago

Bill this is a great post!  I think I may reblog it.  Can I change the state specific information on your post when I reblog it?

Posted by Zilkia Olmeda-Martins, GRI, Realtor, San Antonio Texas Luxury Homes (RE/MAX North - San Antonio) about 10 years ago

Well done explanation the gain can be wonderful but as a buyer you need to protect yourself. Good advice.

Posted by Terry & Bonnie Westbrook, Westbrook Realty - Grand Rapids Forest Hills MI Re (Westbrook Realty Broker-Owner) about 10 years ago

Mary -  That must have been a real shocker for the buyer. Foreclosures are risky no doubt about it.

Annie & Terry - Thanks for the compliments on my article. There is quite a bit to know about the whole foreclosure process.

Zilkia - It is not possible to change anything in a re-blog. You can add what you like at the top when re-blogging.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Very imformative post. This deserves a subscription! Keep it up!
Thanks

Posted by The 1410 Group of Benchmark Realty, LLC (Benchmark Realty) about 10 years ago

Bill,

Great post and great advice especially the part about the title search! Congrats on the feature!

Posted by Mike Frazier, Northwest Tennessee Realtor (Carousel Realty of Dyer County) about 10 years ago

Bill - What an abundance of information here.  Buying a foreclosure can be a great deal if one has the right information and right support staff.  As they say, if it were easy... everyone would be doing it.  It takes access to the right tools and teachers to do it right.  Very good article, Bill. 

Posted by Jason Sardi, Your Agent for Life (Auto & Home & Life Insurance throughout North Carolina) about 10 years ago

Bill, Fantastic information. Very timely since most markets have at least 30% of all deals as REO properties. Good advice on suggesting an attorney although our contracts suggest on all properties. Thanks again for the great post! I may have to re-blog this one as well!

Posted by Kristi DeFazio, Colorado Springs Rea lEstate 719-459-5468 (RE/MAX Advantage) about 10 years ago

Colorado no longer has a redemption period which does make it easier for anyone purchasing a foreclosure through an auction.  Your post clearly highlights the different avenues to purchase a foreclosure and the risks involved. 

Posted by Patricia Beck, Colorado Springs Realty (RE/MAX Properties, Inc., GRI, CDPE) about 10 years ago

Bill, great post, fitting for our time we are in.

Posted by Bettina Settles, Your Indiana Connection about 10 years ago

Bill,  Excellent information - too many buyers think buying a foreclosed property is a "cake walk"  It is odd to think that it is a seller's market for the distressed homes,  Karen

Posted by Karen Kruschka, - "My Experience Isn't Expensive - It's PRICELESS" (RE/MAX Executives) about 10 years ago

Bill - very solid information. Working with investors from all over the globe I got used to explain all the time that foreclosure does not mean a real bargain. It's hard to explain the difference between the real houses and the so called "houses" which are offered by banks or via auctions untill the buyers can actually see the difference.

You can not assume any good or normal outcomes while buying these houses. Due diligence is critical. I even like that banks always ask the buyers to sign all these awful addendi which are all about one: buyer owes everything, seller owes nothing. Buying foreclosed or pre-foreclosed properties may be rewarding yet highly risky experience.

Posted by Svetlana Stolyarova, Local-n-Global Realty, Broker 216-548-4663 (Local-n-Global Realty, Cleveland and International Real Estate Solution) about 10 years ago

Mike, Jason, Kristi, Patricia, Settles, Karen - Thanks for all your comments on my article about the trials and tribulations of working with foreclosures. These are transactions that are not cut out for everyone one. You need to know there are real risks involved.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill ~ The information you have outline here on "Buying a Foreclosed Home" should be passed along to all consumers  who are considering buying a foreclosure!

Posted by Terrie Leighton, Reno Real Estate Agent ~ Selling Homes in Reno (Ferrari-Lund Real Estate ) about 10 years ago

Those 'infomercials' are the snake-oil salesmen of the day.  They are NOT making money off real estate . . . they ARE making money off people that pay $29.95, $69.99, $129.95 for their "system" (that they just can't do without.)

Plus, I've always wondered how someone can go into the 50 states and talk "substantively" about real estate (my state's threshold) without possessing a real estate license (in all 50 states.)  Talk about practicing real estate without a license.  Geez!

In buying LOCAL real estate -- foreclosure included -- always turn to a LOCAL professional!!  From the comments, sure seems as though some agent really do know what they're doing!  Present company included.

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 10 years ago

Bill,

Very well written blog.

Education is so important in this market.  I think there is opportunity out there, but buyers need to be educated, not just sold, in terms of what their options are.

Posted by Mark MacKenzie about 10 years ago

Excellent and well written. In everything you do in life, being educated and informed will make it smoother while minimizing unpleasant surprises later down the road. I think we all get excited when things seem to good to be true, cause we really want it. This article tells people clearly to look for opportunities and then doyour due diligence, and make sure your investment is going to be the deal you initially believed it to be.

Good advice, and a great educational article!

Thanks again! 

Posted by Mark A. Lee about 10 years ago

Another piece of excellent work from a "Great Mind"!  Love the great use of all the details to consider before you "take the Plunge"!  Thanks again for sharing such good information for us to use in our daily lives.  That is one (just one) of the reasons I enjoy your posts so much,  I can always count on great content!

Posted by Debbie Hutchins about 10 years ago

This was a great article.  I currently list REO properties in Durango, Colorado and I know that purchasing these homes is not for the faint of heart.  Also, it is important to realize that the banks have helped to contribute to their own foreclosure problems by selling these REO homes significantly below market value and therefore decreasing the value of the surrounding homes.  Even though I am currently listing quite a few of these homes right now...the situation is still very sad

Thanks for the article...It provides important explanations that a lot of people don't know

Posted by Denise J. Storm about 10 years ago

Great information!  We are a bit behind but shortsales, foreclosures and REO's are growing in numbers.  My greatest concern is when the seller only offers a special warranty deed but as you suggested, I will have my buyers turn to the attorney to clear the title.  Thanks for such a long and informative post!

Posted by Diane Aurit, Lake Norman Real Estate (LKN Realty, LLC) about 10 years ago

Hey Bill-- great article.  Really well done and informative.  I'm not logged in right now, but this is Michael George, Karen's husband.  Have a great day!

Posted by Michael George about 10 years ago

Bill, Great post, Great info. I am re-blogging, Thanks.

Posted by Jean Terry (Keller Williams Realty Spartanburg, S.C.) about 10 years ago

Carla - That is definately true. I don't know how people fall for that kind of stuff. Heck if investing in foreclosures were that easy we would all be doing it.

Mark - Thanks. I like presenting the facts as well and then letting the buyer make an informed decision.

Mark L - Research and finding out the facts 1st is the key. Having a knowledgable Realtor and attorney in your corner for a foreclosure transaction be very beneficial.

Debbie - Thanks a bunch. I enjoyed writing this article because it really hits home with all the foreclosures taking place at the moment around the country.

Denise - The emotional part of a foreclosure is very sad. There are a lot of good people who have run into some unfortunate economic times.

Diane - Doing a title search early on is really important to know what you are getting yourself into.

Michael - I hope you are well. I still think about Karen. She was one of my favorite bloggers here and I loved reading her articles about SEO.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Hi Bill  - Fabulously presented primer for the consumer!

Posted by Wendy Rulnick, "It's Wendy... It's Sold!" (Rulnick Realty, Inc.) about 10 years ago

Bill,

I always tell people that just because it's a foreclosure...that they should just have their eyes light up before they find out there is generally more too it.....liens searches are most important and most banks don't care and leave them unpaid and buyers can get stuck with it.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (eXp Realty) about 10 years ago

Bill thank you for the kind words to my son. take care

Posted by Everard Korthals, Lancaster real estate (Castellum Realty LLC. - International Real Estate Brokerage) about 10 years ago

Buyers of these property need to do their due diligence "before" making offers on foreclosures.

Good job in explaining the differences and the potential pitfalls.

Posted by Cameron Wilson, The Short Guy - Murrieta,Temecula,Menifee Californ (Labrum Real Estate) about 10 years ago

Wendy, Neal, Everard, Cameron - Thanks for your comments about buying a foreclosed home. There is certainly quite a bit to know about foreclosures before jumping right in.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Thank you for warning the bargain hunters that unless this is downtown Detroit, 50% or less is not the norm. In Oklahoma we have been holding steady on value so a foreclosure or a short sale bought properly has real equity. It is also helpful to use someone, preferably a realtor, with the chops to navigate something like a short sale. Too often I see realtors who see it as just another listing and haven't done their homework, and don't possess the patience for sometimes a long period. I have a specialit on my team who has fought the lenders for six months and more and beeen successful. We also have out local title companies to property profiles to check for liens. Thank you for an imformative and well researched article. I would be confident to do business with you.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) about 10 years ago

Joe - There is a lot for a Realtor to know in both foreclosures and short sales. There are still many that are uneducated on these subjects. Not a good thing when a consumer gets stuck with one of these agents.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill, thank you for sharing your insight on foreclosures and all that they entail! 

Posted by Tony Orefice, Realtor/Harrisburg NC,Concord NC (Wilkinson ERA/www.TonyORealtor.com) about 10 years ago

Outstanding, informative post. That right of redemption is tricky- people need to be hip to their state's laws.

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) about 10 years ago

Bill -  One of the best posts that I have read on this subject. Well Done.

Posted by Greg Miller, Florida Home Loans - Conventional,FHA,USDA,VA (Ruoff Home Mortgage ) about 10 years ago

Tony, J, Sharon - Thanks for the compliments on my article about foreclosure property.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Good post and lots of good information. Thanks for sharing.

Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) about 10 years ago

Bill, I loved this post so much I reblogged it. Like you say, foreclosures are not for the faint of heart! The Foreclosure market is like bowl of thick soup. You often don't know what you are getting into until you stir it up! Great job putting this together.

Posted by Ginger Sala, Wilmington NC Real Estate & Relocation~ (Wilkinson & Associates, Wilmington NC) about 10 years ago

Hi Bill -- Wow, what a clear and comprehensive topic.  This is one to definitely bookmark as it has so much all in one place.  You write incredibly well.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) about 10 years ago

Terrific information - very clear about all the potential risks in foreclosure - caveat emptor for sure!

Posted by Emily Lowe, Nashville TN Realtor (The Lipman Group | Sotheby's International Realty) about 10 years ago

Bill - What a comprehensive coverage of things to do and consider when purchasing a distress property.  Some just think of the so call savings but don't think of the potential hidden cost.  Yes an attorney is a must to get the proper searches done. 

Posted by Jennifer Fivelsdal, Mid Hudson Valley real estate connection ( JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571) about 10 years ago

Bob, Ginger, Chris, Emily, Jennifer - Thanks for all your comments and compliments about my article on buying foreclosures.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill - What a great post !  There are sooo many items that buyers need to know when buying these types of properties and you covered most of them.  Financing is typically critical for many properties may not be financial with traditional loans.  Or if it is FHA, the buyer would be responsible for any repairs for the loan to go through as well.  This is where FHA 203K may be applicable.  Also, in Philadelphia, sometimes the buyer has to pay both sides of the transfer tax when buying certain foreclosures.  Buyers need to have expert buyer agents when entering into these types of transactions.

Posted by The Somers Team, Real People. Real Dreams. Real Estate. (The Somers Team at RE/MAX Access) about 10 years ago

Whew - lots of comments! 

I get a kick out of negotiating with banks for foreclosures.  My investors usually are pretty set in their goals and have VERY THICK SKINS, which is critical.  Often I surprise myself with what we can get out of the bank.

Posted by Jeff R. Geoghan, REALTOR, Marketing Manager (Coldwell Banker Residential Brokerage) about 10 years ago

Hi Bill, though I didn't read all of the comments, there are huge differences in how we handle foreclosures, etc. That said, your scenario about the "as is," the risks, etc. are right on. We also don't use attorneys, as Realtors handle the transactions typically here in Arizona. There are so many right and wrong ways to purchase a home these days - but the REAL RIGHT way is with a knowledgeable REALTOR!! Great post....;)

Pepper

Posted by Mesa, Arizona Real Estate Mesa Arizona Realtor, AzLadyInRed (Homes Arizona Real Estate LLC) about 10 years ago

Definitely not for the faint of heart.  And  a lot of the REO's out here go out over asking- for two reasons.  Firstly they are often priced under market to generate multiple offers, and then some buyers think that because it is bankowned, it must be a good deal.  And the addenda the banks generate are downright scary!!

Posted by Carol Lee, Realtor - Agoura, Oak Park, Westlake CA Homes (Dilbeck Real Estate) about 10 years ago

Chris - You bring up a good point about FHA financing a remembering there may be things a buyer will need to fix prior to closing.

Jeff - There is no question in many situations an investor can find themselves a pretty good deal in a foreclosure property. One of the things most investors don't have to worry about is an emotional attachement. It is all about the numbers.

Teri - I knew you guys did not use attorneys but someone must do a title search?

Carol - You are right about the perception being anything bank owned is a great deal. This is where are Realtors expertise is valuable.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Great advice, Bill.  I always cringe when a first-time buyer comes into the office and says "I want a foreclosure list... I'll only buy a foreclosure" - then I explain that some highly motivated owners might match the prices on the foreclosure list, and they'll usually agree to consider other options.

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) about 10 years ago

Bill, absolutely....we do have title companies, and they are excellent at their job. A must in this market of course. ;-)

Pepper

 

Posted by Mesa, Arizona Real Estate Mesa Arizona Realtor, AzLadyInRed (Homes Arizona Real Estate LLC) about 10 years ago

bill .. you make it sound easier than it is!!!!

Posted by Pippa Mac, The Woodlands TX Real Estate (Chevaux Group Realtor, The Woodlands and Spring) about 10 years ago

Margaret - I have heard the same thing about foreclosure properties as well. There are some who become narrow minded.

Teri - I figured your state used title companies.

Pippa - I thought I portrayed a pretty accurate picture of what a buyer would be getting themselves into with the purchase of a foreclosed home.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Hey Bill, Not all foreclosures are deals down here in Naples.  In some cases they're actually priced above market value and that's not even including the damage that needs to be repaired.  It's so weird...greedy and unrealistic banks tied to agents who don't know what they're doing!  B E A U T I F U L!

Posted by Shannon Lefevre, Shannon Lefevre, PA Your Naples Smart Girl (John R. Wood Properties) about 10 years ago

This is great information for anyone that is interested in purchasing a foreclosure.  We actuallly had a title company come in to speak to our company and they offered to do a basic title search for any property that we are listing or representing the Buyer on.  At times, the fee for this is nominal and well worth the investment in advance.  At times, title issues can be so overwhelming that your Buyer may not want to get involved.  Again, this information is really helpful.

Posted by Susan Jackowski, Lake Norman NC & Hudson Valley NY (Lake Norman NC) about 10 years ago

Shannon - Wow that sure is not typical to the rest of the country. Why do you think this happens in Naples?

Susan - Thanks. Getting a home with clear title has to be one of the most important considerations when potentially purchasing a foreclosure.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Bill - You provided an amazing amount of important information for anyone considering purchasing a foreclosure or pre-foreclosure.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 10 years ago

Christine - Thanks as you know the is quite a lot to absorb when purchasing a foreclosure property.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

Hey Bill, thanks for this article, though some parts of it are not relevant to my market, I still gave you some link love.

Posted by Brien Berard, Maryland Real Estate Agents - Laurel Real Estate (Remax Professionals Laurel MD) about 10 years ago

Brien - Thanks for commenting on buying a foreclosed property. I am not sure what you mean by giving me some link love though?

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

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