Is A Judicial Sale Riskier Than A Bank-Owned Foreclosure?

Is A Judicial Sale Riskier Than A Bank-Owned Foreclosure?

Purchasing a foreclosure of any kind will always be riskier than a regular home purchase. When buyers are considering foreclosures, it’s important that they know what kind of foreclosure they are interested in and what risks are associated with it. A bank-owned foreclosure tends to be slightly lower risk than a judicial sale foreclosure, but both of these types of Calgary foreclosures should be purchased with the help of an experienced Realtor®. These purchases can have complications that require experience not only with the Calgary real estate market, but specifically with purchasing foreclosures. Here are some of the risks associated with both of these types of foreclosures so that you can understand when a foreclosure is a good deal and what risks you need to mitigate.

Calgary Foreclosures: Judicial Sales Versus Bank-Owned Foreclosures

What Is A Judicial Sale?
A judicial sale is a type of foreclosure where the owner has stopped making payments, the court orders the owners to sell, and the sale goes through the court system instead of through the owner. All offers on the property are submitted to the court to review instead of to the homeowners. The home may be in the court system for a while and the owner of the home can continue occupying the building until the court proceedings end and an offer is accepted. The homeowner will be given some time to vacate the premises, typically between 30 and 45 days. Foreclosures that are considered judicial sales occur when the homeowner is determined to have equity in the property. With judicial sales, after the lender is reimbursed all monies owed, any remaining funds will be paid to the homeowner.

Risks Of A Judicial Sale

  • Judicial homes are sold without conditions. While you can order a home-inspection before making an offer, the foreclosure is sold as-is and once you write the offer there can be no additional conditions. 
  • The homeowners who have been foreclosed on may take appliances or custom home features with them, or they may damage or neglect the property over the 30-45 day period they are given to vacate. These potential problems will not be covered by insurance or affect the price or contract of the final sale.
  • Purchasing a judicial sale is a very complex process. To purchase a judicial sale, you will need the help of an experienced foreclosure Realtor® who knows the intricacies of judicial sales.

What Is A Bank-Owned Foreclosure?
A bank-owned foreclosure is when a person has missed multiple payments and the home is reverted back to the bank. Unlike a judicial sale, bank-owned foreclosures are appraised to have no equity for the homeowner. In these types of foreclosures, the previous home owners have no stake in the home and the homeowners must vacate promptly and do not get to stay in the home while the house is for sale. These types of foreclosures typically allow the purchaser to add conditions to their contract, such as inspections and financing.

Risks Of A Bank-Owned Foreclosure

  • These foreclosure properties are often sold as is, so you should add a home inspection condition on your offer. This will be an added expense and if you end up not purchasing the home can be lost money, but it can save you from purchasing a home in poor condition in need of serious renovations. Here are some of The Benefits Of A Home Inspection When Buying A Foreclosure.
  • Buyers are often interested in foreclosures because they think they will be a great deal, but this isn’t always the case. If you are using a lender they will likely require an appraisal before guaranteeing funds. 
  • Mitigate risk by partnering with a Realtor® who fully understands the complexities of a bank-owned foreclosure. Realtors® who are unfamiliar with the legalities and risks of foreclosures can easily struggle with foreclosure proceedings, so make sure your Realtor® is highly knowledgeable and experienced dealing with all types of foreclosures.


Navigate Calgary Foreclosures With An Experienced Realtor®

Purchasing a bank-owned foreclosure or a judicial sale can be difficult to navigate even for some experienced Realtors®. Buyers are looking to get a good deal but they also need to be cautious of any damage to the home or any potential costs and risks associated with the house. Trying to navigate a bank-owned foreclosure or judicial sale on your own can be nearly impossible and can lead to important aspects of foreclosure purchasing being missed. Get a good foreclosure deal and feel confident in your decision and contract by partnering with a Calgary Realtor® who is highly experienced in foreclosures. The Mel Star team has helped Calgarians purchase thousands of foreclosures and are the leading foreclosure Realtors® in Calgary. To partner with highly experienced and reputable Calgary Realtors® who know the intricacies of Calgary foreclosures, speak with the Mel Star team at 1-403-861-9944 or fill out the online contact form.



A pre-foreclosure home has not yet been foreclosed, but it is going to be. If you are purchasing a pre-foreclosure home, you will be buying it from the homeowner instead of from the bank. These properties can often be very affordable, as the seller has a short time frame to sell the house. Ask one of our Calgary Realtors® about the different options of bank foreclosures versus pre-foreclosure homes for more information and the pros and cons of each.

This will depend on the state of the home, the location, how long you want to be involved with the property, and more. In general, both of these are profitable strategies if you can find a foreclosure at a good price. Learn more about the risks and benefits of both of these by reading Foreclosure Strategies: Flipping Or Renting... Which Is Better?

The bank wishes to sell the property as fast as it can to recuperate the lost money from the missed mortgage payments by the previous homeowner. This is often why foreclosure properties are listed for lower prices than other houses on the market to attract buyers. That being said, this price can be influenced greatly by the Calgary housing market.


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