Massachusetts Bank Auctions
Once a home owner has failed to make payments within the legal time period, the bank begins the process of foreclosing on the property. One of the first stesp of foreclosure to put the house up for auction.
The problem with bank auctions is that there is a minimum requirement for the auction. Usually, the minimum prices about the full amount of the remaining mortgage.
As you can see, in today's market, this means that the price way too high. Most foreclosure auctions do not even result in bids. After all, if there was enough equity in the property to satisfy the loan, the owner would have probably sold the property and paid off the bank. That is why the property ends up at a foreclosure or trustee sale.
In additional to higher prices, the bidding process requires that you must have the full amount immediately after a successful bid. You must have a cashier's check for the full amount of your bid. If you are the successful bidder, you receive the property in "as is" condition, which may include someone still living in the property. There may also be other liens against the property that you will have to resolve.
Foreclosure Auction Pros
A Few Good Deals: Some times in neighborhoods less affected by the real estate bubble, there are some houses which could be a good deal. This is espespecially true if you are sure of the area and type of property you are in the market for.
Foreclosure Auction Cons
High Prices: By definition an auction results in the property going the highest bidder. This means that you will be paying the high price by default and there is no negotiation
Legal Issues: You may have evict the existing tenants and resolve any other liens against the property
No Home Inspection: No home inspection contingencies are not allowed at bank auctions. Properties are sold as is and immediately
