Massachusetts Foreclosed Homes

Short Sale Tutorial [Video]

The following video contains a basic tutorial on short sales in Massachusetts. It is presented by real estate broker and lawyer Dave Kres, who is the co-owner of Buyers Brokers Only, LLC. Many short sales are in pre-foreclosure status, and completing a short-sale transaction typically takes from two to six months. Buying a short sale requires a great deal of patience.

Court Ruling Halts Foreclosure Sales

A Springfield, MA Land Court judge's ruling that two banks improperly seized two properties in foreclosure has halted the sale of many bank-owned properties across the state, the Boston Herald reported June 9, 2009.

"Experts say Land Court Judge Richard Long’s recent decision to void two Springfield-area foreclosures over procedural flaws has gummed up resale of foreclosed homes across the state."

One local listing agent that sells mainly bank-owned properties told the Herald that, "It’s just stopped everything," and 12 of her sales have been halted since the ruling.

Due to the judge's decision, title insurance companies are not willing to write lender's or owner's title insurance policies. Without the availability of a lender's policy, lenders are not willing to provide financing on such deals.

"The judge found that the banks held foreclosure auctions even though both lacked documents at the time proving that they really owned the homeowners’ mortgages. That 'clouded' each property’s title, discouraging any third party from bidding on the homes, Long ruled."

I have a similar situation regarding a sale of a single-family home in Tewksbury, MA. My buyer agreed to purchase the property from an investor who bought the property from a bank. For the same reasons as in the Springfield court case, the property has a defective title. We are waiting for the outcome of the case.

"Experts say paperwork flaws are common in foreclosures these days, as mortgages often changed hands over and over again during the 1998-2005 housing boom. Any missing paperwork can call into question whether a bank really owned a loan it foreclosed upon."

Read The Boston Herald Article

Tax Credit Helps With Homes In Need Of Repair

The following video created by Boston.com is of first-time home buyers that bought a home in Watertown, Massachusetts. The couple said that, among other things, the first-time home buyer federal tax credit influenced their decision to buy now.

The couple also mentioned that the $8,000 tax credit will help them make repairs to the home built in 1933.

The Biggest Myth About Bank-owned Properties

How many times have you heard something like the following? "Banks are not in the business of real estate. They want to sell these properties fast." Anyone who makes such a statement clearly has not recently been involved in negotiating any bank-owned home sales in Massachusetts.

The idea that banks are just giving away, or even selling for a substantial discount, foreclosed properties could not be further from the truth.

The fact is that banks will routinely reject offers of say $235,000 on a home listed for $250,000. Now, this does not mean that the bank will not eventually accept $235,000, but only after another month or two have passed and the price has been lowered. The banks typically employ one of two strategies.

1. Reduce the price of a property every month or so until the price results in one or more offers at or more than the list price. Along the way, the bank may reject several offers at or more than the ultimate sale price. It sounds crazy, but it is absolutely true.

2. List the property at below market value. This strategy usually results in multiple offers over the listing price. Multiple offer situations really put the banks in the driver's seat, as far as negotiations go. It's is not unusual for some bank-owned properties to have five, 10, 15 or 20 offers, most of which exceed the asking price. 

Home buyers interested in buying a foreclosed home need to know exactly what they want in home, have pre-approval letter for both a regular and rehab loan and be ready to act fast, if a potential deal comes along. Working with a real estate broker experienced in helping clients buy bank-owned properties and a real estate lawyer is an absolute must. 

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Multi-property Foreclosure Auction

The following March 9, 2009 video is from CNN Money about a multi-property foreclosure auction in New York and one family's quest for their first home.

Did he overpay in the heat of the moment?

Foreclosure Listings For Free

The Boston Sunday Globe on October 26, 2008 published an article discussing the difficulty in finding foreclosure listings online.

The article also mentioned the fees most Web sites charge for the listings.

The Globe reporter obviously did not know about this Web site, MassForeclosed.com, which provides consumers with bank-owned and short-sale listings absolutely free.

Read The Boston Globe Article

Couple Wins Auction, But Can't Buy House

Buying a home at a multi-property auction has been difficult, if not impossible, in Massachusetts.

Another winning bidder, Alexandria MacKinnon, on an allegedly foreclosed Massachusetts home auctioned by Real Estate Disposition Corp. has found she can't close on the home because the foreclosure process is not yet complete, The Boston Globe reported May 14, 2008.

 

After a March auction, Real Estate Disposition Corp. told MacKinnon and her husband to prepare for a closing by May 8, 2008, so the couple gave notice to their landlord and qualified for a mortgage loan. Then the closing was postponed indefinitely because the mortgage company that was working for the buyers told them it couldn't make the loan because the seller did not yet own the home.

"Real Estate Disposition was warned by state regulators before the March auction against including any properties it did not have the right to sell. The company has said it auctioned several such properties at a previous event in November."

Buyers are faced with a great deal of frustration when dealing with banks and the companies that represent them. Buyers also make the mistake of attempting to complete the process without professional representation.

Read The Boston Globe Article

Trashed Bank-owned Properties

The headline is a little misleading. It suggests that there are some bank-owned properties that aren't trashed. Well, there are, but not many.

The Boston Herald reported April 28, 2008 that many ex-owners of foreclosed properties take lighting fixtures and trash homes on their way out the door.

It's absolutely true, and it happens more often than not. It's to the point where I am amazed to see a bank-owned property that isn't in really crappy shape (Herald Photo).

"People rip up walls, kick in doors or take bathroom fixtures or copper wiring - sometimes to sell, other times just to get back at lenders."

Here's a tip: Don't open any refrigerators left behind.

"Figures on vandalized foreclosures are hard to come by, because owners can legally do what they want with homes until lenders seize property titles. Crooks also sometimes hit homes after former occupants have moved out."

When I hear about investor wannabes buying foreclosed property at auctions without seeing the inside I cringe.

“'You drive up and say, ‘Wow, what a nice house!’ ' the broker said. 'Then you look inside and say: ‘My God, what happened here?’ Short of taking the shell of the house, everything is gone.'”

Read The Boston Herald Article

About 170 Homes For Sale At Boston Auction

About 170 foreclosed Massachusetts properties were up for sale at an Auction at the Hynes Convention Center March 29, 2008, the Boston Herald reported.

Real Estate Disposition Corp, an Irvine, Calif.-based company, held the auction, but is under investigation by state officials for allegedly selling some houses at a November 2007 auction before the foreclosure process was completed, according to the Boston Herald.

I'd be a little nervous when the people working the auction are wearing tuxedos (Herald photo). After all, these are properties with leaky roofs, filthy carpets and wet basements.

Read The Boston Herald Article

Interested In Buying Foreclosed Property?

Buyers Brokers Only, LLC is sponsoring a home buyer seminar on Saturday April 5, 2008 from 10 a.m. to 12 p.m. at the Best Western (401 Lowell Avenue, Haverhill, MA) in Haverhill.

Learn about every aspect of buying a home: mortgages, pre approval, finding a home (single-family, condos, multi-families, new construction), the multiple listing service (MLS), buying bank-owned properties and short sales, negotiating the best price, home inspections, purchase & sale agreement, the closing, tips and advice from the professionals and an opportunity to ask all your questions.

Space Limited: Please RSVP by filling out the form online or by contacting Alexa by March 31, 2008 at 978.457.4552 or astone@buyersbrokersonly.com. Space is limited to 50 people.

Knowledgeable Speakers:
Richard J. Rosa, Esq., Buyers Brokers Only, LLC: Rich is a real estate broker, lawyer and co-owner of Buyers Brokers Only, LLC. He has practiced law for 12 years, and he is a member of the Massachusetts Association of Buyer Agents.

David S. Kres, Esq., Buyers Brokers Only, LLC: Dave is a real estate broker and lawyer, as well as co-owner of Buyers Brokers Only, LLC. Dave earned the North Shore Association of REALTORS® (NSAR) Rookie of the Year award in 2006 and currently is the president-elect at NSAR.

Robert Barr, VIP Mortgage: Rob is the vice president of sales for VIP Mortgage, located in Danvers, MA. He has 20 years of experience in the mortgage industry and has helped more than 1,000 individuals/families finance their first home.

Jeffrey Stelman, Esq., Schribman & Stelman, LLP: Jeff is a partner in the law firm of Shribman & Stelman, LLP, located in Salem, MA. He has practiced law for 17 years and has conducted more than 1,500 real estate closings.

Josh Amsler, Jackson Home Inspection: Josh works for Jackson Home Inspection in Andover, MA. He has more than 10 years experience as a licensed home inspector and has completed more than 6,000 home inspections. He also is a member of the National Association of Home Inspectors.

Donation: $15 per person. All proceeds going to Rebuilding Together Greater Haverhill, Inc., which helps revitalize homes and neighborhoods for low-income homeowners and communities in need, especially the elderly, the disabled and families, helping them to live in warmth, safety and independence. Please make checks payable to Rebuilding Together Greater Haverhill Inc., and please mail checks to Buyers Brokers Only, LLC, 7 Kenoza Avenue Haverhill MA 01830. Space limited to first 50 people, so please RSVP.