Foreclosure sales quite often are thought to be really good deals, but are they?
Depending on your current situation, a sale on a foreclosure might be the right fit for you, but it is important to understand how the process works so that you can decide. When a homeowner defaults on their mortgage here in Canada, the lender will commence the process that will result in a court ordered sale. Foreclosure proceedings must be commenced by a petition that sets out the relief sought and then sets out the factual basis for the relief, once the petition is served to all parties whose interests may be affected by the proceedings such as any registered owners, co-signers, 2nd mortgage holders etc. Lenders then request an Order Nisi from the court; this order when granted commences a time frame where the owners can pay out the mortgage and retain ownership of the real estate in question. This is called the redemption period and the Supreme Court of BC has consistently stated that the usual redemption period is 6 months and that shortening this period is a matter of sound judicial discretion. During this period, the owner may continue to live in the property and cannot be made to leave except in exceptional circumstances. Technically, the property can be sold during this period, but the foreclosed upon owners could still payout the mortgage and regain control of the property. Upon Expiry of the redemption period, lenders usually put the property up for sale with a Real Estate company via a Lawyer who is acting for the lenders. This is the time the property is made available to the public for a court ordered sale. Foreclosure sales have some very important cautions that all buyers need to know and understand. It is very important to have an REALTOR® that understands the process as it is different from your standard purchase. Foreclosure sales are generally on an “as is where is basis” and there is no guarantee as to condition on possession date, plus appliances and other chattels are not included. Oh, and there is no guarantee your offer will be the winning offer.
So, is a foreclosure sale right for you?