Buying a foreclosure
In today’s economy and real estate market some buyers are taking a closer look at buying a foreclosure property more than ever before. Understanding the process and working closely with an experienced realtor, mortgage broker and lawyer who are familiar with buying a foreclosure can make all the difference.
I recently helped a young couple towards the successful purchase in buying a foreclosure. They had 5% down payment, income and good credit so it was a pretty straightforward purchase. They viewed a lot of properties and then found a condo in foreclosure that had no offer in place. We discussed the process with their realtor and set up a strategy to make an offer and prepare for the court date. Anyone buying a foreclosure will have their day in court where the judge will review the subject free purchase agreement (subject to financing and all other subjects must be removed). If the judge agrees to the purchase agreement and no other competing offers are made by other potential buyers in the court, the judge will approve the agreement and deposit will be paid to secure the purchase.
In this particular situation the couple made an offer which was accepted by the bank (who now had possession of the property). We took that offer to our lender for approval and also submitted for higher price approval in the event the buyers had to make a counter offer in court if other competing offers were made. The application was approved – after appraisal and review of client documents for income, credit and down payment. The court date was set and the buyers, along with their realtor went to the court. In this case there were no competing offers and their purchase agreement was accepted. If there had been competing offers, the couple would have a back up offer – with no subject to financing ready to go. Only the buyer with the original offer can counter to a competing offer in court. If they had to make a counter offer and were outbid they would have lost the purchase.
Buying a foreclosure can be a bit more stressful and take more time for the buyer and the realtor. However, with support from a professional realtor, mortgage broker and good legal counsel from your lawyer, the process can be quite smooth and you may get a new home for a very good price.
To learn more about buying a foreclosure and to discuss specific deals with a local real estate team, mortgage broker, financial planner and lawyer, join us in Feb 20th, 2013. http://buyingaforeclosure.eventbrite.ca/#