Paul Herrick’s Blog

With historically low interest rates and reasonable Massachusetts home pricing, the real estate market is busier than ever! Buyers can take advantage of cost-saving purchases such as short-sales and foreclosures/bank-owned properties. Sellers can rest assured that with proper pricing and full-scale marketing, they will receive the most money for their property in the shortest amount of time.

You don’t have to look very far and you will find dozens of bank-owned properties in your community. “Sold as-is” “Buyer must sign standard addendum” “Acceptance of earnest monies without a signed Purchase and Sale Agreement does not bind the Seller” are all some of the coined phrases used by Realtors in marketing bank-owned property. One of the nice things about purchasing  property from the bank once they’ve foreclosed is that the prior owners have usually moved out. This is not always the case when purchasing at a foreclosure auction.  Here are some of the many reasons why a bank-owned property may be a good opportunity for you:

• The bank will usually set an ‘at-market’ or ‘below market’ listing price because they are selling the property as-is
• The bank will usually negotiate beyond the listing price. It does not make financial sense for the bank to carry the asset (the property) and maintain it; be liable for it; and deal with (often) long-distance management especially during the winter in New England. This makes them eager to negotiate with a qualified buyer
• The buyer pool for bank-owned property is small since many buyers fear the “as-is” language and the unknowns of dealing with a bank seller.
• Typically, you still have an inspection contingency and financing contingency, unlike purchasing at foreclosure auction.

With thousands of upcoming foreclosures in Massachusetts, banks will continuously strive to sell their assets in a quick fashion. This rush of bank-owned inventory will continue to provide  opportunities to today’s buyers and investors.

Purchasing from a bank is a lot different than  buying from a typical seller.  You have to be patient: response time from a bank can be days or weeks instead of hours. Final ‘approvals’ of the contract to purchase are subject to investor review & revocation. Attorneys  working on behalf of the banks are bogged down with too much work, and the closing may be delayed because of this.  Other hassles include winterization (the property has been winterized where all fixtures have had the water removed and are in non-working order); lack of a sellers statement (the bank knows nothing about the property and therefore there is  no one  to ask specific questions of).

If you  are patient you will find the right property  for the right price. Work with lender and Realtor partners who can assist you with long-term  interest rate locks and negotiating  on your behalf.  

Let us  answer your questions or  tell us about bank-owned property experiences you have had!  

Welcome to the Paul Herrick Group’s weblog. Please feel free to inquire and discuss various real estate topics of interest and we’ll be happy to discuss and advise as to such.

 Paul Herrick has been an important component in the North Shore real estate market for twenty years. His most recent accomplishments include an award for Best Realtor Website in Massachusetts. The Massachusetts Association of Realtors named www.PaulHerrick.com as one of the top websites in the Individual Agent Category. Many resources such as local events and community links are available through the site. Quoted from an article about the award published by  Bay State Realtor, ‘Involvement in the community can be what separates a good agent from a great agent,’ referencing Paul’s site. Herrick is actively involved in his community and is the #1 Agent in Beverly from September 2006 to September 2007. Participating in 75 transactions, nearly double the sales of the #2 agent, Herrick continues to set himself apart from the rest. Visit www.PaulHerrick.com to  see the award winning website, or to view more biographical information on his career and his team members.