Buying a foreclosure can be quite the process, there are many things that you need to consider before you get involved.
Time
It can be a long process. It is not like a typical Real Estate transaction, where you have a 1-week subject removal. You actually remove your subjects first and then wait for a court date to be set in order to get court approval for the sale to go through.
Foreclosure Clause: As-Is, Where-Is
Before you start the process of buying a foreclosure it’s a good idea to view the property. This is where things can get VERY interesting. Many people going into foreclosure are disgruntled, so they trash the property. Leave rotting garbage in the property, remove light fixture, damage plumbing, heating, flooring, and walls. You can imagine that the property can smell terrible, in addition to looking terrible and sometimes not even being safe.
All foreclosures are sold “as-is, where-is,” so it is important to account for possible extra costs in cleaning, disposing of waste, and possible repairs.
Vacant Possession
Sometimes the previous owner does not follow the court order to vacate the property. In order to have the previous owner removed from the property you will need to file a “writ of possession” with the court and use a court bailiff to evict them. This can future delay when you get access to the property.
Competing Offers
Other potential buyers will be made aware of the initial purchase price offered. This gives them the opportunity to outbid the original offer on the court date. The initial purchaser is allowed to revise their purchase price when they arrive in court. Once an offer is approved by the court the contract is binding.
Contesting a Foreclosure
Even if you are the highest bidder on the property, it does not mean you will automatically get it. The current owner and other creditors can contest the price, if they feel it is not high enough.
The Reward
So far foreclosures seem a little scary and like a whole lot of work. So, what’s the advantage? You are usually paying under market value for a property, which in a market like Vancouver’s can make home ownership a much more realistic possibility.
If you have the time to go through the process and the energy to fix the property up, you can definitely make a pretty penny on a foreclosure.
For more information on foreclosures click here. If you or someone you know is looking to purchase a foreclosure property reach out to Your Two Awesome Realtors and we would be happy to guide you.
