When a homeowner can no longer make their home payments, the home defaults to the lender and is put up for sale through the lender. This is called a foreclosure, and these homes can be an opportunity for a good deal for potential buyers. Because the bank wants to recoup any losses, the price of the home is typically lower for a foreclosure sale than a regular home purchase. But be warned that even though foreclosures can be a great deal, it can be difficult to find a good quality, affordable foreclosure. Completing the paperwork and navigating the purchase of a foreclosure can also be difficult on your own and it is recommended to partner with a Realtor® experienced with the sale and purchase of foreclosures.
Foreclosures 101: What To Know
How Common Are Foreclosures In Alberta?
Canada tends to have more lenders than the US who offer reasonable payment plans that work well for homeowners, which makes foreclosures in Canada rarer than they are in the US. Homes in Alberta also tend to be more affordable than homes in BC and Ontario and people are more likely to be able to make all of their payments. Because of this, foreclosures are not very common in Alberta in general. If you are looking to buy a foreclosure, you will need to pay attention to foreclosure listings, carefully assess market conditions, and time your purchase properly. While this can be difficult to do on your own, partnering with a Realtor® who is experienced with foreclosures can help you find the right deal.
What Are The Risks Associated With Foreclosures?
When you purchase a foreclosure, you need to ensure that the home has no damage or any outstanding liens and that you are prepared for the strategic navigation of foreclosure negotiations.
- The condition of the building. Because foreclosures are repossessed homes, they can sometimes sit empty for a while, which can result in a lack of maintenance in the home. Before you purchase a foreclosure, your lender may require an assessment. You may also want to schedule a viewing to see the home in person, although this may not always be available before purchase. When possible, search for red flags in the foreclosure and always get a professional foreclosure home inspection.
- Outstanding payments. You also need to be careful during the purchasing process to ensure the home has no outstanding payments or liens and that no undocumented work has been performed on the home.
- Purchasing legalities. Foreclosures have lots of rules and intricacies that other home sales do not. For example, foreclosures are typically sold as-is and often require more paperwork and documentation than a typical home sale. Because of this, foreclosure sales can take longer to process. Navigating foreclosure purchases without a Realtor® who is experienced with foreclosures can be extremely difficult and can result in oversights of the purchasing contract. It is always best to partner with a Realtor® when purchasing a foreclosure.
What Are The Benefits Of Purchasing A Foreclosure?
Foreclosures are typically priced lower than other homes. The bank is often looking to recoup their losses instead of an owner trying to make a profit, so foreclosures can often be purchased for a great price. Many people also like to use foreclosures as a project to renovate and sell, and foreclosures tend to create the most profit as flipped home projects.
Before you purchase a foreclosure, make sure you know the difference between a bank-owned foreclosure and a judicial sale.
Purchase A Foreclosure With The Help Of An Experienced Realtor®
If you are interested in purchasing a foreclosure, ensure that you get a fair deal by partnering with a Realtor® who is specifically experienced with foreclosure sales. Having a Realtor® who understands the Calgary housing market and who has years of experience working with foreclosures will be able to help you find the best properties for sale while advising when the best time to purchase is. The Mel Star team of Calgary Realtors® has helped with the sale and purchase of thousands of foreclosures. Our team of expert Realtors® can help you find a foreclosure that suits your needs and we can expertly navigate the foreclosure contract. To find your next home, contact the Mel Star team at 1-403-861-9944 or fill out the contact form.
FAQ
When buying a home in Calgary, you should start by checking your credit score and speaking with a lender to determine a budget range. Then, come talk to the team at Mel Star. We can set you up with customized property searches, show you homes, and help you negotiate a great deal when you find the home of your dreams. To get a jump on exploring the Calgary real estate market, check out our featured Calgary real estate listings here.
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.
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.
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