I frequently get asked about how to go about finding foreclosure properties in the NH real estate market. With so many foreclosures happening now there are actually three ways to pursue foreclosure properties in the NH real estate market.

1) Pre-foreclosure: These are people who know they are going to lose their home. If they have equity you may be able to purchase their home at a great price and save them from having to go through with a foreclosure sale. 

Pros: The seller is usually motivated, resulting in a good price.

Cons: Can be a bear if it turns out that you are dealing with a short sale.

2) Foreclosure auction: If the seller couldn’t remedy the situation by selling their home or working out an arrangement with the bank, then the bank can elect to foreclose on the property. Many times the foreclosure auctions are held right at the property.  

The big danger in buying a NH foreclosure at an auction is that many times your access to the house is limited and you literally have to buy from the street. So if there is mold in the attic or water damage, etc, you get to find that out AFTER you own the property.

The other big problem is that many foreclosures happen on properties with negative equity. An unfortunate side effect of the credit boom is that many homeowners used their homes as big ATMs and refinanced their homes to the point that the mortgage(s) were higher than what the property was worth. When that happens it is essentially pointless to bid because it doesn’t make sense to bid higher than what the bank is owed against the property, not to mention all the other liens that may be placed against the property like tax liens that would need to be cleared.

Pros: Slight chance you can get a property with equity in it.

Cons: Major risk involved as an inspection of the property is not usually possible as well as other liens that you might not know about would need to be cleared.

3) REO (or real estate owned): This is when the bank “wins” at an auction and now takes possession of the property and it enters their portfolio of what are called “non performing assets”. The nice part about purchasing at this point is that the bank has already taken the loss on the property, you have the ability to do inspections and do other due diligence on the property without the high pressure situation of an auction.

Pros: Since the bank owns the property, they may be more motivated to get it off their books, resulting in a better sale price for you as a buyer. Also, you have the chance to inspect the property and back out should the property have issues that the seller doesn’t want to fix. The seller also will get rid of any liens against the property prior to conveying the property to you.

Cons: You may find yourself in a multiple offer situation if the bank really is trying to unload the property. 

My experience with the foreclosure process has shown that options 1 and 3 to be the best way to purchase a foreclosure. Option 2 is not usually viable as great deals can be had without the associated large risk involved in the auction itself.

There are several foreclosure properties available in the area.  Sign up for the free foreclosure service now and find out about the best priced properties in the NH real estate market. 

Andy Benjamin
RE/MAX Properties I
603-674-5864 (cell - best way to reach)

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