If you want to purchase a new property but the price is too high, you should consider foreclosures. Check out the Penticton foreclosure listings and you may find your dream home and at a lower price. Keep in mind, though, that the Canadian law regarding foreclosed properties is strict when it comes to the price of a house compared to its market value. As a result, you will not find houses more than 20-25% cheaper than their market value.
What does a foreclosure mean?
When a person is not able to pay its mortgage for a period of time, the bank will take that property and try to sell it to cover the mortgage payment. This gives an opportunity for those who want to buy a new home. And because the back wants this process to run faster and smoother, they ask for a slightly lower price than the market price of that property. Whether it is a new home, a second home or an investment home (one that you will rent out), you can acquire it cheaper.
You need to understand that foreclosures are market-value transactions. And because they are court-ordered sales (most of the time), the rights of the in-debt owner are protected and the court decides the correct price of the home. You need to know that if the price of a property seems a bargain and much too low than it should (even for a foreclosed property), chances are there is a good reason for that (repair, maintenance, etc.).
What is different to an offer on a court-ordered sale?
On a regular listing, your real estate agent will add several clauses in the purchase offer that provide you with due diligence on the property (like inspection, approval for financing, etc.). When the offer is on a foreclosure, you have to be the first in order to get an offer subject to the standard conditions. If you are not the first, then you have to give a sealed bid at the court. This means you will spend money on the inspection and get your bank to approve your financing of the property before you have the contract in place. This may be riskier than the typical sale and the one deciding the winner will be the master at court.
Your Penticton real estate agent will prepare the offer and submit it to the lender for consideration. After that, back-and-forth negotiations will take place until a consensus is reached. The conditions will be removed, and the lender’s lawyer will set a court date for the offer to be approved (2-3 weeks from acceptance).
If you want to know more about foreclosures, contact Penticton Real Estate. One of our agents will help you understand how you can buy a foreclosed property in the Penticton area. With our assistance, you have to opportunity of purchasing any property under excellent circumstances. Contact us and ask for a foreclosures list or to learn about other homes for sale in Penticton.