Even for the experienced investor, purchasing property at foreclosure or in a post-foreclosure auction can be daunting. There are many considerations, legal issues, risks and responsibilities that aren’t present in a conventional residential real estate transaction. Property is purchased “as is where is”, so due diligence prior to the auction is key. Foreclosure purchasers are responsible for obtaining possession if the property is occupied after the sale is complete. Costs traditionally borne by sellers, such as back taxes and outstanding condominium fees are shifted to auction high bidders.
Purchasing bank-owned property (known as Real Estate Owned or REO) after the foreclosure sale eliminates some of this risk. Banks typically sell properties in their inventory vacant and pay any outstanding taxes and condominium fees. They generally allow for inspections and give purchasers an opportunity to withdraw from the transaction without penalty if the inspector finds defects. However, the (non-negotiable) contracts favor the banks and it’s important that purchasers understand the strict timelines and overall obligations and have sound legal guidance throughout the process.
Foreclosure law in Massachusetts has seen many changes over the last decade. A series of decisions from the Commonwealth’s Supreme Judicial Court have added additional requirements and documents, including documents that are not part of the recorded record at the Registry of Deeds.
We recommend you involve your attorney early in the process – before you sign a Memorandum of Sale or REO contract. Our staff at the Law Offices of Sonja B. Selami, P.C., represents buyers, sellers and lenders and would be happy to assist you with your purchase of foreclosed property. Please call us at (508) 424-0600 or send us a message to schedule a consultation.
The following list is a sampling of resources for finding local pending foreclosures and REO properties for sale.
Bank Owned Properties for Sale:
- Federal Home Loan Mortgage Corporation: https://www.homesteps.com/
- Federal National Mortgage Association: https://www.homepath.com/
- U.S. Department of Housing and Urban Development: https://www.hudhomestore.com/Home/Index.aspx
- Wells Fargo Bank, N.A.: https://reo.wellsfargo.com/
Foreclosure Auctioneers in Massachusetts:
- Commonwealth Auction Associates, Inc.: http://www.commonwealthauction.com/
- Bay State Auction: http://www.baystateauction.com/upcoming-auctions/
- Daniel P. McLaughlin & Co, LLC: http://www.re-auctions.com/ScheduledAuctions.aspx