The number one question I get asked all the time is what are the steps you need to take to buy a foreclosure in BC? Buying a foreclosure in BC is very similar to buying any other house except it needs the court approval to complete the sale. I’m going to take guess work out of buying a foreclosure in BC and give you the step by step process!
- Find a forclosure you are interested in buying and contact a forclosure a forclosure expert (email MarcLaCouvee@gmail.com or call 250-228-3428)
- Work with Marc to submit an offer to the owner (when a home is in foreclosure the bank takes back ownership)
- Get your offer accepted by the bank. You will then have a chance to do a home inspection, get financing and anything else your Realtor® has advised you to write into the offer as condiotions of the purchase.
- Once you are satisfied with the home inspection and any other conditions you have included in your offer, you can remove your subjects and submit your deposit. Once you do this...then the deal is firm.
- Once you have a firm deal, the bank will request a court date to approve the sale. It can commonly take 2 - 6 weeks to get a court date.
- At this time, the seller's Realtor® is required to inform all other interested parties of said court date and the accepted price on the property.
- At anytime prior to the court date, the property can be viewed by other parties and they will also become aware of the accepted price on the offer.
- If another party likes and is interested in the propery, and is willing to pay more than the accepted offer, they can arrive at court and submit an offer.
- During the court procedures, the judge will ask if there are any additional offers. At this time all offers are submitted by sealed bid.
- If you are the original party (original offer) you will also have the option to submit a new higher offer once you see how many other offers are being submitted. You will have only one chance to increase your offer and submit it to the judge in a sealed envelope along with the offers being submitted by other parties. All ofers submitted at this time are required to be free of conditions....ie all parties will have eitehr done their finaincing, building inspections, etc. in advance of the sealed bid or will be waiving these conditions.
- If you are the original party and are the only one to show in court, then the judge will look at your offer and approve the sale. It is very common to have other parties show up to bid, especially if the price is under market value.
- Once all sealed bids are submitted, the judge will open them all at the same time and review. He/she will take a few things into consideration...price, completion date and the amount of the deposit.
- The judge will then decide, based on these three criteria, who has teh best offer and will approve teh sale to that person.
- If you were not the original party (original offer) and you submitted a bid in cort that was accepted, you will be required to pay your deposit to the court to bind the sale.
The person with the highest price isn’t necessarily the person who is going to win. When the bank takes control of a house it cost them money everyday to maintain it. They will be paying for heat, hydro, maintenance fees and a property manager to take care of the property.
Let’s say I am the original offer that gets accepted by the bank and we get a court date. My accepted offer price was $300,000 and I want to take possession 90 days after court. If someone else shows up to court and offers $300,000 and wants to take possession 30 days after court then the judge would consider that to be a better offer. It costs the bank on average between $40-$80 a day to keep that house on the market. The judge won’t just be looking at the price and possession dates, they will also be looking at the size of the deposit. A big deposit; however not necessary, is always a good way to show the judge how serious you are. A big deposit will increase your chances of winning in court.
The above article is intended as information only and is not intended as legal advice.
For more information on this procedure, please contact me at 250-228-3428