Buying a foreclosed property must be done with care. Compared to the purchase of other real property, foreclosed properties come with their own specific challenges.
Purchasing a foreclosed property usually occurs (1) at the public foreclosure auction sale or (2) from the bank or lender who foreclosed the property, commonly known as a real estate owned (“REO”) property.
Here, I’ll discuss some important topics for buying a foreclosed property.
Foreclosed Properties Are Often Sold “As Is”
Compared to the process of purchasing most other properties, buyers of foreclosed properties generally have few opportunities to inspect the property in advance. Moreover, in most sales of foreclosed properties, a buyer takes the property “as is”, and has limited recourse for any problems later arising in the property.
Title Problems With a Foreclosure Can Become the Buyer’s Problem
Massachusetts is known as a non-judicial foreclosure state, which means that a foreclosure can occur without a court case. Foreclosures, however, must be done with strict compliance under the law. An error in this process can invalidate the foreclosure sale, and can impede a subsequent buyer’s ownership of the property.
Not every error in the foreclosure process will affect the property’s title. However, a buyer of a foreclosed home needs to be mindful of the potential errors that can arise in the foreclosure process, and ensure that such issues have not occurred for the property they wish to purchase.
An Eviction Is Required for Occupants in the Home
If any occupants remain in a property after foreclosure, they must be evicted, through a formal court case. Any attempt to remove occupants without an eviction case is highly illegal and will lead to many problems down the road.
Compared to standard evictions, evictions for foreclosed homes are a slightly different process, and requires knowledge of Massachusetts foreclosure law. This is especially true if the occupant is the former homeowner, and wishes to challenge the foreclosure sale.
If you need assistance with buying a foreclosed home, contact me for a consultation.