I wanted to share some insights about court-ordered sales, as I’ve been getting questions from buyers in Vancouver and the surrounding areas. These sales occur when a homeowner defaults on their mortgage, and the lender forces a sale through the courts to recover funds.Court-ordered sales come with significantly higher risks and take longer than a typical sale, but for those willing to accept the challenges and put in the effort, there’s potential to secure a property below market value.
Key Points to Know:
1. Foreclosures are Marketed Like Regular Listings
- The property is listed on MLS and open for showings to ensure fair market value.
- In many cases, the property is occupied, which can make access and obtaining good photos more challenging.
2. Properties are Sold "As Is, Where Is"
- The lender offers no guarantees. Damage, missing appliances, or poor maintenance may exist.
- If the owner is still living in the property on possession day, the buyer may need a court order to remove them.
3. Making an Offer
- Offers must include clauses such as "As Is, Where Is" and "Subject to Court Approval."
- After acceptance, buyers can conduct limited due diligence, such as reviewing strata documents or, if possible, arranging an inspection.
- The first offer price and court date are made public, allowing other interested buyers to submit competing offers.
4. Finalizing the Sale in Court
- On the court date, the court reviews all offers. Competing buyers can submit higher bids.
- All offers must be unconditional and include a bank draft deposit.
- The court selects the best offer, typically the highest, and the sale is finalized.
Important Notes for Vancouver Buyers:
- Understand the Schedule A Form: This document outlines key details about the sale—read it thoroughly.
- Offer Below Market Value: Since you’re bearing additional risks, ensure your offer reflects those challenges. Remember, if you’re the initial buyer and lose the property to another bidder in court, any money spent on inspections or due diligence will be lost.
- Hire a Buyer’s Agent: Work with an experienced buyer’s agent familiar with the Vancouver market to guide you through the foreclosure process. Bring your agent to court for support and representation.