Boston Forclosures and real estate owned homes

The following listings are all available foreclosed homes in the Boston area. Buying an REO home can be a great way to find a deal. Check back often to catch new listings. Please contact us for any questionns you may have about any of our reo listings.

Foreclosure Homes and How To Buy Them

If you’re in the real estate market for a new Boson home, but want to get the most out of your money, you may first want to look into buying a foreclosure in Boston and some of the surrounding communities..

Often times, it’s one of the best ways to find a home that fits all your needs as far as size, location, etc., while staying within your price range. But before you jump into house hunting for foreclosure homes, there are a few things you need to understand to make sure you know exactly what you’re getting into.

What Is A Foreclosure Home?

A foreclosure is a home that belongs to the bank, but once belonged to a homeowner.  A common term you may see when these homes are referred to is REO - which stands for Real Estate Owned.

There are various reasons why a home would be put up for foreclosure, but some of the most common ones are that the homeowner abandoned the home or voluntarily gave the bank the deed to the home or the home was reposessed because of lack of payment.

You might be familiar with the phrase “the bank is taking back the home”, but this isn’t actually the case. The bank cannot take the property back because it hadn’t owned it in the first place. What happened was, the bank foreclosed on the mortgage or the trust deed and was able to seize the home. There is a distinct difference.

There are also many reasons why a home owner may stop making payments on a home that they own. In some cases the homeowner was fired or laid off from their job and subsequently was unable to keep up with the payments, or they were unable to continue working due to a medical condition.

Sometimes a seller has excessive amounts of debt and is unable to continue making payments on the home, or it’s simply that there are too many maintenance issues with the home and they can no longer afford the upkeep.

What is an REO?

When a home does go through the foreclosure process, it becomes what is known as an REO (or real estate owned) property. This means that the house is now the legal property of the bank, and they may sell it as they please.

Typically, this was agreed upon between the borrower and the lender as part of the loan agreement. The owner has been unable to pay their mortgage for whatever reason, so the bank has the right to auction the home at a trustee sale to recoup their losses.

Buying A Foreclosure Home

A home being sold that is an REO or forclosed on by the bank can vary quite substantially from a typical residential sale.  Most homes being sold by a bank still get listed by a Boston real estate broker so they can be placed in the Boston MLS and have local representaiton. So although the seller is a bank - you will still be dealing with a real estate agent in the general Boston area.

When a bank hires a Boston real estate agent to sell their properities, they listing agent goes through a valuation process in which they provide a BPO or Broker Price Opinion to the bank. The bank looks at the amount of money they have "in the house" as well as what the Boston Realtor says the specific property is worth.  From there, they come up with a listing price.

Writitng an Offfer on an REO Property

When you writie an offer on a forclossed home, whether it be in Boston, Cohasset, Hingham or anywhere else, you should prepair to fill out a good bit of additional information. This additional documentaion is generally reffered to as the REO addendums.  These documents must be supplied and signed off on, by the buyer, with their purchase agreement.  

Before Making an Offer on a Forclossed House

Just like with any other listed home for sale, you should view REO properties prior to submitting an offer. 

Some questions to keep in mind as you view a foreclosed home include the following:

• Does the home seem livable?
• How is the condition of the home?
• Would the cost of repairs make the savings on purchase worthwhile?

These are critical questions as the answers not only affect how much you should offer for the property, but can effect the type of financing you can recieve on the property itself.  If you are purchasing the home to move into, the home will have to be livable at the time of closing, or you may need to look into alterate types of financing or pay cash for the property. In all cases when dealing with foreclosed properties, take the time to invest in a professional home inspection. A home inspection can shed some light on any problem areas the home may have as well as give you piece of mind knowing there are no major issues going into the purchase.

Time Frames When Purchasing an REO Property

Another major difference between purchasing a home from an individual and a bank can be the timeframes needed.  Because the listing agent will be sending the offer off to the Asset Manager for the bank to review and most Asset Managers have hundreds of homes they are responsible for, you need to allot addtional time for a response.  Every piece of documentation that gets submitted goes through that process.  

Using the Right Agent

Purchasing a forclosure can be a great way to get a deal on the home of your dreams.  Keep in mind, banks are not dumb!  They do not generally "give away" homes for much less than they are worth. In addtion, migrating through the tons of addtional paperwork when dealing with an REO property can overwelming if your agent is not familiar with the process.

As an example, a real estate agent that is not familar with represeting buyers in a forclosure or REO sale may not be familar with all of the REO addedums.  Also, Realtors not versed in buying forclosures may submit your offer with a traditional time-line for the experation of the offer.  This can cause undue delays as the time the bank responds, the legal purchase agreement may have expired. 

If you are thinking about purcahsing an REO Property, useing a real estate team that is familiar with the process can make the transaction go much smoother.

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