The purchase process of Foreclosure Properties is very different from the normal process of purchasing Real Estate in BC. We hope you find this information helpful as you pursue purchasing property in Kelowna; if we can help you with any other questions you have about Kelowna Real Estate in general, please contact Ruth Lamb directly at: 250.826.4633
Once a lender receives a Court Order on a property, called Conduct of Sale, they will generally have an appraisal done to establish an asking price, and then list it on the MLS system. At this point, a buyer can make an offer on this property. The purchase process for a foreclosed property is not like a property that is normally listed that is not under foreclosure.
What happens is:
1. The buyer makes an offer to purchase the property and there is a subject period where the purchaser removes subjects such as home inspection, financing, title search etc.
2. The seller [lender normally] will require the buyer to sign what is called a 'Schedule A' which in essence states that they are accepting the property 'As Is' and have no recourse for any defects they may discover after they purchase.
3. Once the offer is subject-free the seller [or seller's lawyer] will apply for a court date to present the offer before a Judge [known as a Master in Foreclosure proceedings] and this normally takes about 3 weeks.
4. During the 3 week period leading up to the court date anyone from the public can go to the court registry at the courthouse and find out how much the offer is for and bring their own offer at the court date.
5. The subject free offer goes to court. Once in court the vendor's lawyer presents the offer to the Master.
6. The Master asks if there are any other parties in the courtroom who want to submit an offer. If not, and the offer is market value, the Master will approve the sale. If there are competing offers the Master will instruct all parties including the original purchaser to leave the courtroom and resubmit their final subject-free offer in a sealed, envelope to the seller's lawyer.
7. After all offers have been submitted the Master reviews the offers and approves the best offer.
All offers made at the court level must be subject-free offers. As you can see, buying a foreclosed property is not as simple as many think. Even if you have an accepted offer on a foreclosed property, there is a high likelihood that there will be other offers once you reach the court proceedings. However, this process can also be an exciting one and with the expertise of a licensed and experienced Realtor, there are some good deals to be had in the foreclosure market!