Arlington MA Foreclosures and Bank Owned Real Estate
Arlington MA bank owned foreclosures describe property the lender obtains after an unsuccessful foreclosure auction. The lender usually sells the real estate by direct sale or market their inventory through a Realtor. Buyers often benefit by purchasing Arlington 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 is to obtain the right to sell at auction. This process will take a minimum of 75 days with substantial delays possible if the homeowner uses the law to their benefit. To view current bank owned and short sale listings go to Arlington MA foreclosures.
Arlington MA Short Sales - Buying at Pre-Foreclosure
There are cases where a Arlington MA homeowner will attempt to sell their home before the bank starts the foreclosure process. 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 difficult process. Additionally, there is no assurance that the lender will accept any offer presented.
If the Arlington homeowner has entered the HAFA program (Home Affordable Foreclosure Alternative) offered by the government, 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.
Massachusetts 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. For this reason, MA lenders proceed very carefully in foreclosing on a property, Review Massachusetts Foreclosure law for government legislation about MA foreclosures.
Buying Arlington MA Homes at Foreclosure Auction
For most potential buyers, purchasing at a foreclosure auction is a "risky" undertaking and, in most cases, buying from the lender after the auction is a better option. As a result, not many Arlington MA foreclosure auctions end with the sale of the property. Arlington MA real estate is a great resource for information about the community which can assist you in evaluating property values.
The title reverts back to the financial institution holding the lien. The property is now "bank owned" and is often referred to as REO (real estate owned).
Arlington 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 tries to get the IRS 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 wants to make it more attractive to potential buyers and maximize the value.
Banks want to sell foreclosed property quickly because they don't want to tie up their money in capital reserves. 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 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". The Arlington MA MLS will provide you with direct access to all current listings.
State and Federal requirements regarding property disclosure must be followed by lenders. They usually state 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 unknown material defects 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 their stockholders. If a buyer is unreasonable in negotiating the lender will move on to the next potential buyer. An Arlington MA bank owned property isn't always the best value for a consumer. It's an old myth that "foreclosures" are a bargain.
Negotiating a Contract for a Arlington Foreclosure 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 inspection reports? Has the lender agreed to any repairs not completed? Is there a special "as is" form? How long does it take the bank to accept an offer? 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. Your offer must be accompanied by your credit approval as a lender will not negotiate with a buyer who is not qualified.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 buyers qualified to buy these properties so lenders will offer greater discounts.
Virtual Homes real estate agents will provide you with a list of Arlington 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.