With the red hot real estate market in Kelowna, I often get the question, is buying a Kelowna foreclosure property really a good deal after all?
There are many factors to consider before going through the foreclosure process. Not to mention there are many risk associated with the transaction that buying a Kelowna foreclosure would not be recommended for the first time home buyer.
A foreclosure is also known as a court ordered sale. When a homeowner defaults on the terms of their mortgage, the lender can apply to the court to order the home for sale to try to collect their loan. Once a lender is granted a conduct of sale, a Kelowna foreclosure property is offered for sale under the terms of the court order.
When a Kelowna foreclosure property is offered for sale, the home is listed on the MLS and marketed by a Kelowna Realtor. When an offer is written, it is presented to the lender and price, terms and conditions are agreed upon. Once the Buyer has completed their due diligence, they remove their subjects, and at that time, a court date is set. The final step to the foreclosure process is that the sale needs to be approved by the court.
So what are the risks?
- No disclosures.
- There is little information about the home. As a buyer, you are left to do your own research. Where a traditional Okanagan house for sale would have a property disclosure statement, no such document is available for a Kelowna foreclosure property.
- The property is sold “as is”.
- This means there are no warranties and guarantees on how the property if left at the time of possession. The risk is higher when the home is still occupied. You must agree to take the home in whatever condition it is in the day of possession.
- Other offers could be presented on the court date and you could lose out.
- The accepted price of the home is public knowledge and anyone can bring an offer on the day of the court hearing. The property could sell for higher than the price that was originally accepted.
There are some good deals out there in a Kelowna foreclosure property but you need to be a savy buyer. Not all foreclosures are the big deals that they may seem. Know the market, know the risks.
Before deciding on buying a Kelowna foreclosure property, talk to an experienced agent who knows what to do when buying a foreclosure an can to give you good advice on how to proceed. The team at Quincy Vrecko and Associates are experienced real estate agents that have worked with many buyer navigating through the foreclosure process.