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Haverhill MA Foreclosures and Bank Owned Homes for Sale

By
Real Estate Agent with Virtual Homes Real Estate

Haverhill MA Foreclosures and Bank Owned Homes for Sale

Haverhill MA foreclosures, bank owned and REO (Real Estate Owned) are terms commonly used to describe properties that are owned by a lender (investor, financial institution; typically a bank), after an unsuccessful sale at a foreclosure auction or property obtained by a "deed in lieu." The lender will then resell the real estate by direct sale or market their inventory through a Realtor. Buyers often benefit by purchasing Haverhill 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 lien holder(s) is to obtain the right to sell at auction. In MA, 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. Go to Haverhill MA foreclosures and register to receive a list of distressed real estate.

Haverhill Short Sales - Buying at Pre-Foreclosure

There are cases where a Haverhill Massachusetts home owner will attempt to sell their home before the bankforecloses on the property. The home owner 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 assurancethat the lender will accept an offer at or above the listed price or any viable contract presented. 

If the Haverhill homeowner has entered the HAFA program (Home Affordable Foreclosure Alternative) offered by the US Treasury Department, the process is streamlined and offers the lender, homeowner and potential buyer additional incentives. Home buyers have a better chance of purchasing the property if a Seller is participating in this program. Lenders are in different stages of implementing this process and it is important to verify this information.

MA Foreclosure Law

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. If a homeowner files for bankruptcy, the court can overturn the foreclosure sale if sold for less than market value. Therefore, lenders in Massachusetts proceed carefully and follow the requirements set forth in the law. Review Massachusetts Foreclosure law for government legislation about MA foreclosures.

Buying Haverhill Massachusetts 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 Haverhill MA foreclosure auctions end with a bidder being successful with an accepted offer. The lender takes back the title and takes possession of the property. The property is now "bank owned" and is often referred to as REO (real estate owned).

Haverhill Bank Owned or Foreclosed Real Estate

After a bank (lender, financial institution) forecloses on the property (after an unsuccessful auction), they mitigate items owed by the prior borrower, such as homeowner association fees. The lender also attempts to remove any tax liens against the property. If the property is occupied, the lender will make arrangements for the owner or tenant to vacate by eviction or with financial incentives.The property is cleaned and minor repairs are made to the property. The lender hopes to obtain a higher net sales price with minor improvements.

Banks want to sell foreclosed property quickly because they don't want to tie up their money these assets. Additionally, managing a foreclosed property may see further reductions in value and is a "headache". Lenders that have significant REO inventory often have a separate department to manage their inventory. In most cases, the lender will list their foreclosures with Haverhill 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. Lenders often market property "as is" which puts the potential buyer on notice as to the lender's position on minor repairs.

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. Property that has major structural defects or will require extensive repairs will be the buyer's best value.

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.  A Haverhill MA bank owned property isn't always the best value for a consumer. It's an old myth that "foreclosures" are a bargain.  Consider all available property for sale which can be viewed at Haverhill MA homes for sale.

haverhill ma mls map

Negotiating a Contract for a Haverhill Property

Before submitting 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 documented inspections? Has the lender agreed to any repairs not completed? Are there required bank addendums?How quickly will the lender respond?How is the offer negotiated?

Since lenders  do not typically work on weekends and due to the volume of REO inventory, the negotiating process may take longer and create frustration for the buyer. 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.

Understand that lenders will sell at "fair" market value and do not expect "fire-sales" that you have seen of heard of in the media. As mentioned earlier, properties that need substantial structural and mechanical repairs will be negotiated aggressively There are fewer buyers qualified to buy these properties so lenders will offer greater discounts.

As the Regional Manager of Virtual Homes real estate I can assist you in the purchase of Haverhill 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.

 

Comments (1)

Paul Gapski
Berkshire Hathaway / Prudential Ca Realty - El Cajon, CA
619-504-8999,#1 Resource SD Relo
 

yes they look so nice but Foreclosures are such tough on to stomach.

Sep 25, 2011 02:22 PM