Saturday, April 4, 2009

Foreclosures not such a great deal

It's the first sunny warm day I can remember in the last..... don't actually remember! Phones are ringing and the Kelowna real estate market seems to be at long last picking up.
One of the things that we get asked a lot about are foreclosures. Most think they are the best way to get a "good deal" when in fact there are so many details and things that work very definately AGAINST buyers that I thought I'd take a moment to address it. When a property goes into foreclosure and is being offered for sale on the active market the most common way a court date is set is by an actual offer being accepted with the only subject being "subject to court approval". This then opens up a whole can of worms... if you're the buyer with the accepted offer in place, you're tied to that house until the court date. In the interim anyone else can not only go to the courthouse to see what your office is, they too can make an offer. Generally these offers will be slightly higher than yours and will be presented in a sealed envelope so you, the person with original offer, doesn't know what they're up against. All due diligence (financing, home inspection, etc.) has to be done prior to going to court which means costs are incurred by a buyer.
Once the court has approved an offer, the buyer, who has already agreed to the house being in a "as is, where is" condition upon possession may find on move-in day that the old owner has taken a 9 iron to do some golf practice inside the house. The buyer has no recourse should damage, large or small, occur after offer acceptance.
The last but not least detail that can bungle all a buyers best efforts is that Canadian Banks (who rank #1 in the world by the way!) are mandated to attempt to get as close to "market value" as possible in a foreclosure situation. 3 appraisals are usually done and the court has to get as close to that as possible.
There are many other ways to get an incredible deal with a lot more safety nets for you the buyer available... foreclosures should be at the bottom of your list. Give me a shout if you're wondering what direction to go in.
Hope you're enjoying the sunshine.
Talk to you soon...


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