Given the current economic climate, more and more foreclosed properties are becoming available for purchase. Foreclosures, or judicial sales, offer a unique opportunity for buyers to get into their dream home, or add to their real estate investment portfolio at prices below the market value. Typically, a foreclosure occurs when a homeowner can no longer make the mortgage payments and either the home becomes a bank-owned property or becomes a court-ordered judicial sale. Purchasing a foreclosure can present some unique challenges.
When deciding whether or not to purchase a foreclosed property, there are some things that you will want to consider before signing on the dotted line. Here are 4 points to pay attention to from one of Calgary’s top foreclosure Realtors®.
Purchasing a Foreclosure in Calgary: 4 Things to Know
Foreclosure Consideration #1: Are you in a hurry to buy? Foreclosure listings are not always a speedy process. When you purchase a foreclosed home, or a judicial sale, you are buying the home from a bank or the courts so this means the purchase will not be as quick as in a typical home sale. It can take weeks to set the court date to hear if the offer has been approved or not.
Foreclosure Consideration #2: Are you purchasing with conditions? Typically because you are buying from an institution and the court dates take a long time to set, having to remove conditions can make purchasing a foreclosure more tricky. If there are conditions that need to be removed when you make an offer, your Realtor® will recommend that you make the offer and begin removing conditions before it reaches a judge. Judges tend to favour the highest offer with the fewest number of conditions.
Foreclosure Consideration #3: Are you equipped to repair the home? While it isn’t always the case, sometimes a foreclosed home is not in the best of condition and requires some extra work to make it livable again. Many people who chose to purchase a foreclosure or judicial sale know that there may be issues, renovations, and remediation needed after the purchase. Another possible concern with a home that is in foreclosure is that there may still be someone residing in the property. There is no guarantee what the home will look like when you take possession and it is being sold ‘as is’ meaning fixtures and appliances may be missing.
Foreclosure Consideration #4: Do you have the knowledge and know how to spot a real estate deal? At the end of the day, buying a foreclosed home is a great way to acquire property and get a good deal. Although it may feel as if there is some extra “hoop jumping” involved, in reality the process is quite simple when you partner with a Realtor® in Calgary who has decades of experience working with judicial sales and foreclosures. Additionally, partnering with a Realtor® who specializes in these types of listings will ensure they are keeping their eye out for the next great deal for you.
The Mel Star Team: Your Calgary Foreclosure Specialists
If you are interested in keeping your eye out for that perfect investment property, that great deal just waiting to be fixed up and flipped, or your next family home at a great price, then the Mel Star Team has you covered. With forty plus years of experience and an expertise in helping our clients through the foreclosure purchase process, The Mel Star team of professional Realtors® know all of the ins and outs of real estate in Calgary. Send their team a message below to keep you posted on new foreclosure listings, or call them at 1-403-861-9944 to talk through your next foreclosure purchase option.
FAQs
Q: What is the difference between a home that is ‘in foreclosure’ and one that is ‘post foreclosure’?
A: When a home is in foreclosure it means that the homeowner has defaulted on the mortgage and the bank has begun the foreclosure process. During this time the homeowner has the ability to reside in the home and they can still end the foreclosure by paying what is owed to date. A post foreclosure home means that the lender, or entity that owns the mortgage, has fully taken control of the property.
Q: How do you buy a foreclosed home in Alberta?
A: All foreclosed homes are listed for sale in the MLS real estate listings and depending on where the property is in the process may have an effect on the action terms and conditions of the sale. Your best bet to navigate the foreclosure and judicial sale process is to work with a qualified foreclosure real estate group like the team at Mel Star.
Q: How can I prepare for buying a foreclosed property in Calgary?
A: When you buy a foreclosed home there are some things you will want to prepare for that don’t necessarily apply when purchasing from the owner such as:
- Buyer beware. Often foreclosed homes have angry people leaving it who may feel free to take what they want on the way out. The bank is not responsible for the state of the home and you are agreeing to purchase it ‘as it’.
- Change the locks. Further to the point above, it's best to have new locks put on in case angry previous owners or tenants were residing there before the bank, or court, took over.
- Plan for work. Often foreclosed homes need some TLC. From landscaping to renovations, keep in mind, and budget, that your foreclosure purchase may need some work.
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