How to Buy Foreclosed and Bank-Owned Homes in Alberta

Buying a Foreclosed Property in Alberta Tags: , , ,

Buying a foreclosure property in Alberta appears a lucrative option and it is easy enough to find one that may not ordinarily have been in your range. However, if a deal looks too good to be true, it may just be. Buyers must understand that buying a foreclosure property in Alberta is different from simply buying a home. And while the television and magazines spill the stories of great flips regularly, foreclosure homes come with a certain amount of risk that the buyers must know before making an offer on a foreclosed property.

In general, foreclosed properties or bank owned properties are ones on which the owner defaulted to pay up the mortgage and the lender repossessed the property. Foreclosure properties in Canada are sold either by a judicial sale, under the supervision of the court, or by a power of sale that allows the holder of the property to simply sell it without any court supervision.

Information about foreclosed properties in Alberta and other provinces of Canada can either be obtained from the court, which is a time consuming process, or accessed online on listing services such as ForeclosureSearch Canada that regularly list foreclosures of all types including bank foreclosures, bank-owned homes and  foreclosure auctions across Canada.

Follow these tips once you have decided to buy a foreclosure property in Canada:

Make a thoughtful offer – Buying a foreclosed property not only requires you to know when a foreclosed property comes on the market, it also requires you to be prepared in order to make a quick move before someone else walks away with the bargain. Remember, when you are buying a bank-owned homes for sale in Alberta, you are dealing with a bank and not a home owner. It is simply a business deal for the lender who will accept your offer if the numbers match their expectations. The lenders often prefer an unconditional offer; so indulge in some research before naming the price you’d like to offer. Determine the amount by keeping in mind the market value of the property, the outstanding loan against it, potential repair costs and any other liens against the property.

The right price would be lower than the market value but more than the outstanding loans – a win-win situation for everyone.

Knowing the stage of foreclosure of the property will guide you on whom to contact for making an offer. For bank owned properties, you need to contact the asset management department of the relevant bank holding the property.

Get loan pre-approval – While there is less room for negotiation when you opt for a foreclosed property, being pre-qualified for a home loan can help you negotiate better. Having a pre-approval not only tells you how much you can afford to spend, but also ensures that the repossessing lender, who doesn’t want to keep the asset on its books for long, is more open to negotiations, perceiving you as a serious buyer.

Personal Research – The most important point that all buyers must remember is that foreclosure properties are sold on an ‘as is where is’ basis without any of the usual warranties. Considering that the owner of the property had been in default, it may not be surprising to find the property in a run down condition. However, once you sign the dotted line, the property, with all its benefits and defects, is squarely your own. Thus, doing your own research will go a long way in helping you make a winning choice. Inspect the property physically, ask the neighbours for inputs and make your offer subject to a home inspection if possible.

Lastly, keep yourself abreast of the market by subscribing to an online listing service and educating yourself. Apart from finding information about distressed properties in your preferred location across Canada, you can also access informative blogs, property reports and a host of other information about the foreclosure property market on ForeclosureSearch Canada.