"Your Okanagan Connection"

Kelowna and Okanagan Area Foreclosures

Thank you for your inquiry and request for information on Kelowna and Area Foreclosures.

Okay, so you have asked me to show you some foreclosure properties and we find one that is of interest. You decide that you want to place an offer on it and now court procedures must be considered. So here’s how it works: First your offer is submitted to the listing agent who in turn forwards it on to the lawyer for the financial institution (Bank).  Once the lawyer and the bank have reviewed the offer they set a court date which usually ends up being 10 days or so from the initial offer date.  In the meantime you as the Buyer are able to proceed with your due diligence period of home inspection, finances etc.  

The court date arrives and I will be there to represent your offer and I recommend that you be present as well. The reason you want to be present is in case other competing offers come into play. We will not know the interest level in the home until the court date. Let’s say for instance there are three additional offers that are presented the judge will likely send all interested parties away with instructions to come back with your best price. Essentially, this creates a kind of auction type atmosphere and drives the purchase price higher to benefit the Seller.  Keep in mind that the judge only cares about the bottom line for the bank and not for the potential Buyers.

Here are also some common foreclosure questions:

1)  The prices are not firm by any means, they are set by the banks and are reduced until the property sells. You are able to offer whatever price you want, it doesn't mean that the courts will accept it on behalf of the bank.  Also, once an offer is prepared and a court date set for the judge to review the offer other competing offers may surface. Ideally, you want to offer something that the judge will feel is fair to the Seller(Bank). There is some strategy to it and if done correctly it usually results in a very good buy for the purchaser!

2)  As I mentioned above the judge really has the final say as to whether or not to accept an offer.  The amount left owing on the mortgage may be well above or below the current market value of the home.  The judge will want to recover as much money on behalf of the bank/creditors as possible.  It is important to learn as much about a foreclosed property prior to making an offer in order to give you the best chance of having your offer accepted!

3)  To learn more about a particular foreclosure property prior to making an offer is where I come in. I will be able to pull a title search, tax assessment and give you comparables of recent sales in order to give you a rounded view of the property and the current marketplace.  We will then take all this information and sit down and discuss the best strategy to get you the home at a price you are happy with.

Keep in mind that the entire foreclosure process is a risk.  For instance, when you submit your offer, and the court proceedings start, there is always the distinct possibility of other parties waiting in the wings that can jump in and submit their bid for the property. The courts are obviously trying to do the best that they can for the banks and if they can create an “auction type” of atmosphere they will in order to drive the purchase price up. The bottom line is there is no guarantee that buying a foreclosure property will translate into substantial savings. As a matter of fact most Central Okanagan foreclosures sell for close to list price once the banks reduce them to market value. I recommend that someone interested in buying a foreclosure property learn the process first before trying to purchase one.

The Steps in a Foreclosure action in British Columbia are as follows:

1. Default

2. Demand for Payment

3. Filing of Petition

4. Order Nisi (final order, usually with time for Redemption (6 months or less)

5. After Redemption Period, either:

5a. Order for Conduct of Sale (special circumstances), OR

5b. Order Absolute of Foreclosure

Where a Lender has obtained an "Order for Conduct of Sale" the Lender's Realtor will be required to attached a Schedule "A" to any proposed Contract of Purchase and Sale which generally states the following terms and conditions:

1. Court Approval of the Offer is required After Subject Removal

2. Court will have full discretion, the lender will not advocate for the buyer

3. Other Offers May be Entertained

4. Title Transfer by Vesting Order of Court

5. Lender makes no Representations or Warranties as to: Title, Condition of Premises, Environmental Condition (otherwise known “as-is-where-is”)

Foreclosure: Foreclosure is the legal process by which a mortgagee, or other lien holder, usually a lender, obtains a termination of a mortgagor's equitable right of redemption, either by court order or by operation of law (after following a specific statutory procedure).

Redemption Period means the ability to “redeem” the mortgage by paying the full amount outstanding, plus interest, costs and taxes. 

If you would like I can add your email to my automatic updates on the newest court ordered sales to hit our marketplace. Call/text Jason Neumann at (250) 808-7700 or email at remaxguy@telus.net today!

Dependably Yours,

Jason Neumann, REALTOR®