The Truth about Calgary Foreclosures
Buyers are more than ever looking for a way to save more money and or get the best Calgary real estate deal that their hard earned money can buy and some often search the Internet for those under valued Calgary Foreclosure properties. But are they really that great of a deal? While in some cases a foreclosure can be a decent or good deal, there are many things to consider before leaping into the purchase of a foreclosed property. In order to understand the negatives of a Calgary foreclosure purchase it is first important to understand the process in which they become foreclosed on.
The foreclosure process can take anywhere between a couple of months to several months dependent on each individual situation. A lot can happen to a property within that time frame. Once the original owner stops making payments on the property they are typically given notice to vacate. A lot of the time these previous owners will take anything they can of value that is literally not nailed down. ( in some older homes they might even take out the copper pipes as they are valuable. A potential buyer could easily miss this during a viewing) Most commonly they take window coverings, appliances and light fixture, but who knows what these people may consider valuable in desperate times. Once the property is vacant a bank appraiser is sent out to evaluate the property. At this point the lender (in first place on title, there may also be 2nd mortgages in 2 nd place etc) has all the control as to what they will ask for the property based on the appraised value. The house is then winterized to avoid any potential leaks etc and then placed on the market for sale. - So even a home inspection will not show any water leaks and you cannot turn the water back on until you own it!
As a buyer you might have interest in the property and decide you may wish to pursue an offer. A lender (in this case also the seller) may or may not allow for you to have conditions as part of your offer. So if you want to do a home inspection that is not a problem but you will want to have one done prior to writing the offer to present to the lender or court is some more rare occasions. The Bank will not provide any warranties for the property, you agree to take the property on an "as is" basis. This is important to understand because if there happens to be appliances in the home they will not be included on the offer or apart of the contract in any way shape or form. So if the night before possession all the appliances are stolen from a break in, you are just out of luck, and the same can be for any other damages that might happen up until possession. So a fast possession is typically in your best interests if you still decide to pursue a foreclosure property in Calgary.
If you are buying a condo- you will not be provided the condo documents for review. Typically they will accept an offer that is conditional to the review of these documents but you must order and pay for them yourself, which could cost you about $300 or more. The same is true for a single family house purchase, in order to place a mortgage you will need an RPR or Real Property Report, typically the seller provides this to the buyer but in such cases of a foreclosure property it is the buyers responsibility to provide this documentation at an average cost of $500 or more dependent on the outcome of the report. (if it does not comply with the city additional remedies may be required) Now a more obvious issue, if the sellers could not afford the payments on the property any longer, I am guessing they have not maintained the property either, and in properties that are not maintained, problems could occur from a lack of maintenance.