After specializing in the sale of lower mainland foreclosure properties for the past 20 years, I have realized that there is a lot of confusion on the purchase process. This confusion is equally shared among the general public and many Real Estate Agents! To be honest, buying a lower mainland foreclosure property is not for everyone, but after you get a better understanding of the process and common things that may come up, you can make that purchase with confidence.
There are two types of foreclosures. The most common type is sold under what is called an order for conduct of sale. This means that the title is still in the owner's name but the bank has the authority to direct the sale. If the home is occupied, the folks are able to reside there until the date of possession by a new owner. The second type of foreclosure is sold under an order absolute. This means that the title of the home has been transferred to the bank and anyone living in the home must vacate at that time. The process for both types of foreclosures is the same, with the only difference being that there is no court approval needed on any offer with an order absolute.
I am always happy to answer any questions you may have but here is the breakdown of the process:
- The first step would be to contact a foreclosure expert realtor like myself to help you with your purchase!
- Once you find your lower mainland foreclosure, you write an offer to purchase that is negotiated between you and the bank. On the offer, you can include your regular conditions (financing, inspection, strata document review, etc.) but you must also include a Schedule A. The schedule A in the foreclosure changes a bit of the wording of the purchase agreement to tailor it to the foreclosure situation. This document must not be altered.
- Once your offer is accepted and you have removed your conditions from the contract, you will be asked to put up a deposit that will be held in trust in your realtor's brokerage's trust account.
- If this is an order absolute property, that's it. You just bought a lower mainland foreclosure! If the home is being sold under an order for conduct, there is one more step.
- The Schedule A has a condition on it that states the offer is subject to court approval. The lawyer for the bank will book a date for this review process to take place, and the home will be marketed right up until that date. Because the offer you wrote is entered into the court registry, it becomes public record and the public is able to learn what the accepted price is.
- On the court date, the master is able to look at any competing bids as well as yours. During Covid, any competing offer will be emailed to the lawyer who is acting for the bank a couple days prior to the scheduled court date. If there should be competition, you will be given the opportunity to revise your bid before all the offers are reviewed in chambers. All offers at the time of the court date will have to be subject free with a bank draft for the deposit attached. The master will be taking price, possession date and the deposit amount into consideration.
- If you are the successful bidder, congratulations, you just bought a lower mainland foreclosure! If you are outbid, you will get your deposit returned to you.
Understandably, buying a foreclosure is not for everyone. Not only is there the stress of the court process, but there is the fact that you are buying the home in an "as is where is" condition. This means that if there is any damage done to the home before you take over, that is your concern and not the bank's. If the home is vacant, the locks have been changed and there is less likelihood of this happening however.
If you would like to receive listing information on court ordered properties before they are released to the general public, just fill out the form below. Make sure you let me know you are wanting lower mainland foreclosures in the comment section!. If you would be interested in all the other homes that are on the market in your price range, click here.
I have been a full time Realtor for 32 years and for the last 17 years I have specialized in the sale of foreclosure properties. In that time, I have sold over a hundred such properties for the banks. I know the process like the back of my hand and can help guide you through this uncharted territory. Please feel free to contact me to set up a face to face meeting where I can go over the process with you and answer all the questions you may have.