Properties in foreclosure are often overlooked or prematurely discarded by potential purchasers. While a property in foreclosure involves a longer and possibly more difficult process than a regular property, they can be very successful purchases. Arlin has acted as the agent on behalf of a number of purchasers and lenders for properties in foreclosure and would be happy to answer any questions his clients may have, or if something is beyond his expertise then to connect them with the right professional who can assist.
What is the process of purchasing a property in foreclosure?
In British Columbia, “foreclosure” is the judicial sale process that occurs when a borrower defaults on the payment of their mortgage. Also known as a court-ordered sale, they are carried out under the supervision of the court.
Once a default occurs, the lender will send a demand letter to the borrower, giving the borrower a short amount of time to payout their mortgage. The redemption period, usually six months, is the time period given to the borrower to redeem the entirety of the mortgage. If the borrower is unsuccessful during the redemption period, the moving party, usually the lender, will seek an order from the British Columbia Supreme Court for conduct of sale in order to place the property on the open market. Thereafter, the moving party property will be listed for sale with a Realtor.
When a party has expressed an interest in making an offer, their Realtor will draft an offer, directed at the Vendor (usually the lender). At this point the proceedings become a little more complicated and vary from the regular offer process. While the lender has the right to accept an offer, subsequently, the lender must have the offer approved by the BC Supreme Court. The Realtor should confirm that the purchaser understands that they will be negotiating with the vendor and an offer may be accepted, there is still a possibility that they may not be the successful purchaser in court. The approval of sale process, especially in Victoria, may be subject to a sealed bid process where other potential purchasers may show up to court on the day approval is being sought and bid against the original purchasers.
Arlin has been through this process many times and can assist in communicating all the intricacies to you.
Disclaimer: This description is a brief summary of the foreclosure process, however it is not intended to be a fulsome description. If you are interested in a foreclosure property, please contact Arlin for more information.