Buying a foreclosed home in a seller’s market can still be a good deal, but it won’t be the amazing price you might otherwise get. With the incredibly limited availability of homes in Calgary, foreclosed homes are also being sought after and their prices will be higher than usual, although likely lower than other, move-in-ready homes on the market. If you want to purchase a foreclosed home in this market, you will need to operate with discretion and do your due diligence or you may end up with a property that costs more in renovations than to buy. If you want to buy a foreclosed home in a seller's market, here are some things you should know.
What To Be Aware Of For Different Types Of Foreclosures
Buying A Foreclosure At Auction. When you buy at auction, there are some risks associated. You will not be able to see the home before you purchase it, so you may be buying a home that needs a lot of work done to it. Buying the home with cash is also encouraged, so you should have that money prepared or you may lose the property to someone else who has the money already prepared. If you don’t have the money there in cash, you will have 24 hours to get it and pay for the home. Auction foreclosures also may have other complications, such as unpaid mortgages, liens, code violations, or even tenants that you may have to deal with once you gain possession.
Buying A Foreclosure From A Lender. When you buy from a lender, you may also be unable to view the home before purchase, but you can have it inspected. This is highly recommended, particularly if the property has sat vacant for a while. Many foreclosures available through lenders may have been without power or water and should be checked for any damages that being without utilities may have caused, such as burst pipes due to a Calgary winter cold snap. The utilities may be turned on for an inspection but it may come at a cost for the buyer. Buying a foreclosure from a lender is more like buying from an individual, as the property is likely in the multiple listing service and the buyer's agent can arrange for a showing of the property, although in a seller's market when properties are moving as fast as they are, waiting for a showing could mean losing the property. Unlike buying a foreclosure at auction, buying from a lender means you can make an offer that is contingent on an inspection of the property and an approval for a mortgage.
Partner With A Realtor®. Buying a foreclosed home always needs a discerning eye, but when it’s a seller's market where foreclosed homes are not as well priced as usual, it is extra important to have a trained professional on your side. A Realtor® will be better able to identify the signs of a good property and to inform you whether a foreclosure home is a good deal. Since buying foreclosure homes is different from buying a regular home, you will want to partner with a Realtor® who is specifically experienced with the sale of foreclosure homes so that they know all of the potential pitfalls.
A Realtor® experienced with foreclosure properties will be beneficial whether you buy from a lender or at auction, but a Realtor® is highly recommended if you’re purchasing a foreclosure sale at auction for the first time, as these properties can spell disaster without an experienced and discerning eye.
Buy In A Sellers Market With An Experienced Calgary Foreclosure Realtor®
Buying a foreclosed home can be a risk at the best of times, but it can also lead to great deals. While a seller's market means that prices won’t be as low as other times, it will still likely allow the buyer to end up with a home that is less than some of the very high prices we see move-in ready Calgary homes rising to. To avoid potential issues and to get a foreclosure property that won’t cost a fortune in renovations, contact a Realtor® from the Mel Star team. Our team has years of experience with foreclosed homes and is one of the leading foreclosure Realtor® groups in Calgary. If you would like expert negotiators to provide sound advice and knowledge, contact a Realtor® from the Mel Star team either by calling 1-403-861-9944 or by filling out the contact form.
FAQs
No, the bank will not pay for any inspection. Inspecting the foreclosed property must be organized and paid for by you. This is an expense you must take on as a potential buyer to ensure the property you are interested in does not have significant unexpected damages.
With a power of sale, the lender (the bank) must sell the property for the highest price possible to cover any legal costs associated with the foreclosure process as well as pay off the missed mortgage payments from the homeowner. Once the sale is complete and all debts are paid off, the remaining balance will go to the borrower (homeowner).
When it comes to buying a foreclosure there is no special training for Realtors. Because of this, it is extremely important to have a Realtor with extensive experience and the knowledge to increase your chances of obtaining a great deal as well as looking after your best interests.
CONTACT US
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