What is a Foreclosure?
Why are foreclosure auctions postponed or cancelled?
Where is the auction held?
How do I qualify to bid on a property?
What is due dilligence?
Where can I find information on a property?
Can I buy the property before the auction?
Am I guaranteed clear and marketable title to the property?
Will I be able to see the inside of the property?
Where does the bidding start?
Will all liens be announced at the auction?
Where is the closing held?
What about adjustments for deed stamps, real estate taxes, water and sewer taxes, condominium fees, etc.?
When can I get the appraiser in?
As High Bidder, when should I insure the property?
If the lender buys the property, whom can I contact to make an offer to purchase it?
How do IRS liens impact me if I purchase a property at an auction?
Who is responsible for back condominium fees?
Will the law office provide title insurance?
Is my bid all inclusive or will I be responsible for additional amounts?
Frequently Asked Questions
A foreclosure is a legal procedure by which property pledged as security for a debt is sold by a lender to pay the debt if the borrower defaults on his/her obligation to pay.
Why are foreclosure auctions postponed or cancelled?
The most common reasons auctions are postponed or cancelled is because the owner makes payment to the mortgagee or files for bankruptcy.
How do I qualify to bid on a property?
You must bring cash, certified, cashier’s bank or treasurer’s check in the amount of the deposit indicated in the auction advertisement. Make the check payable to yourself so you can endorse it if you are the high bidder.
Due diligence is the care that a prudent person might be expected to exercise in the examination and evaluation of a business transaction. As a potential bidder, it is your obligation to gather as much information as possible on the property you are interested in bidding on.
Where can I find information on a property?
The Registry of Deeds is a public place where mortgages, deeds, liens, discharges and other legal documents are recorded and where a title examination of the property can be conducted. Click here for a list of Massachusetts Registry of Deeds. City and town halls also have information on properties located in the community.
Will I be able to view the inside of the property being foreclosed?
Typically we do not have access to the premises prior to the sale. The property is being sold “as is” which includes with or without occupants. It is the responsibility of the high bidder to evict occupants if they chose to do so.
Where does the bidding start?
When bidding commences, the auctioneer asks for an opening bid. If no bids are received, the auctioneer, the lender or the lender’s counsel may enter a bid or may adjourn the sale. If the lender enters a bid and there are no other bids entered by potential bidders, the lender will purchase the property. The lender has the same right as third parties to engage in competitive bidding.
Am I guaranteed clear and marketable title to the property?
The lender does not guarantee or represent clear and marketable title to the property. It is part of the potential bidder’s due diligence to examine the title and determine if title is clear and marketable.
Will all liens be announced at the auction?
The lender’s counsel typically conducts an examination of the title of the property and will provide potential bidders with said information. However, they make no representation or warranty as to its accuracy. It is the bidders responsibility to conduct due diligence.
How do IRS liens impact me if I purchase a property at a foreclosure auction?
If you purchase a property at foreclosure that has an IRS lien, your purchase is subject to a 120 day right of redemption by the IRS. This means that, if the IRS notifies you within 120 days of the sale, it can pay you the amount that you paid for the property and you must transfer the property to the IRS
Who is responsible for back condominium fees?
The successful bidder is responsible for paying any outstanding condominium fees. When these amounts are known, the auctioneer will make an announcement, although we do not guaranty the accuracy of these figures.
Is my bid amount all inclusive or will I be responsible for additional amounts?
At a foreclosure auction the high bidder is typically responsible for any liens having a priority over the mortgage being foreclosed. Most often this includes real estate taxes and water and sewer charges owed to the municipality. Typically, a Municipal Lien Certificate (MLC) will be made available the day of the auction.
What if I am unable to close in 30 days?
The Memorandum of Sale signed by the high bidder at the auction usually provides that the balance of the amount bid is due in 30 days. It also contains a clause that time is of the essence. Any extension beyond the 30 day period is at the discretion of the foreclosing lender. If you fail to deliver the balance of the funds, your deposit will be forfeited.
If the lender buys the property, who do I contact to make an offer to purchase?
When the auctioneer or lender’s counsel has this information we will to provide it to interested parties. The foreclosing lender will usually make arrangements with a local real estate office to list the property for sale.
What about adjustments for deed stamps, real estate taxes, water and sewer taxes, condominium fees, etc.?
These items are all the responsibility of the successful bidder.
Will the law office provide title insurance?
The law office represents the foreclosing lender’s interest and typically does not also represent the purchaser’s interest in the transaction. You must perform your own title research and if you want title insurance you should contact your own attorney or a title company.
When can I get the appraiser in?
If the property is occupied and the homeowner is not willing to provide you with access, you will not be able to get an interior property appraisal until after the closing.
As the high bidder, when should I insure the property?
The Memorandum of Sale states that the high bidder bears the risk of loss between the auction date and the date of the closing. As the successful high bidder you will sign the Memorandum of Sale and will have an insurable interest in the property. You should provide a copy of this document to your insurance agent.
Can I buy the property before the auction?
Until the auction is completed, the property belongs to the mortgagor so you will have to negotiate directly with the owner. Mortgagors should consult with their own attorney prior to signing any agreements.
Where is the auction sale held?
Unless otherwise stated in the auction advertisement, the auction sale is held at the property.
Where is the closing held?
The Memorandum of Sale usually provides that the closing is to take place at the law office representing the lender in the foreclosure. The closing consists of an exchange of foreclosure documents for the balance due of the amount bid.
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