Foreclosure Auctions in MA - Please educate me!

[Steven Tierney]

Hello,

I'm interested in a few properties in Plymouth County, Massachusetts that are being sold at trustee/foreclosure auctions.  I know in Mass, that they are auctioned off on the front steps of the property, and that often times these sales are postponed for various reasons.  I also know that I need to come prepared and have already done my research on the property title, and do a drive-by to possibly estimate repair costs, etc.

Let's say I do my research and decide it's a "go" and I want to attend the auction and bid on it...  What should I expect at an auction like this in Massachusetts?  Do you often get to tour the inside of the property if it's not occupied?  Is it guaranteed that I'd have to be a cash buyer, or could I get a loan to purchase the property?  What kind of legal costs should I expect to evict if the people are still living there?  What kind of expenses will I incur during the closing/foreclosure process?

It's pretty easy to understand how to find these auctions, and that I need to physically be at one, but other than that, I have no experience of what happens AFTER you're the high bidder, and I'm sure it's different with every property...  I know these questions are rather open-ended, but  whatever information you can offer would be greatly appreciated.

Thanks!

[Ann Bellamy]

Steve, you can get a loan, but not from a conventional residential lender.  

Hard money lenders will sometimes finance.  The issues will be:

1.  Title - This is easy, the closing attorney will run title and the lender won't close unless they are satisfied.  The challenge is more difficult for you, because you have to have already had your own attorney run title, and it can change between the moment you check title and the moment that you close on the property.  If you don't close, you lose your deposit.

2.  Condition - more difficult.  You will almost never get to see the condition at the auction.   If you have gained access to the home beforehand, such as taking photos when the property was still listed as a short sale or whatever, you may convince the lender.  However understand that the condition may have changed, and the lender will want you to have the cash reserves to deal with surprises

3.  Occupancy - if it is tenant or previous owner occupied, they may decline because of the long timeline to gain possession. 

4.  You can't get a loan for 100% from a hard money company, you have to have the deposit and it is seriously at risk if you don't close.

Buying foreclosure auction properties is not a good place for a beginner, because of the risks and variables.  Don't try to start here, you will seldom convince a hard money lender to finance a beginner buying at foreclosure auction.  You don't know what you don't know until you've done a few transactions.  That especially holds true at foreclosure auctions.