BC Foreclosures vs BC Pre Foreclosures
ayments. At this point, he is not in default yet because he made his mortgage payment last month.
> Demand Letter / Petition
3 months pass by, Joe still doesn’t have a job, and he’s missed 3 months of mortgage payments. Now his bank/lender sends him a demand letter asking for full payment of his entire mortgage immediately. Joe can’t pay it, so the bank/lender begins a legal process called a foreclosure in which the bank/lender will legally repossess his house. This is done by making aPetition in Supreme Court.
> Redemption Period
At the Petition, the Judge will give Joea Redemption Period, a set period of time to allow Joe to sell the house or repay the mortgage by other means.
The Redemption Period is usually 6 months.
If Joe sells his house within thisperiod, the foreclosure process stopsand he would have saved his house
from being repossessed. If he can’t do that before the redemption period then this will then lead to…
> Court Ordered Sale
The bank/lender will now have the rightto sell the property. They will usuallylist it with a real estate brokerage whichwill make it available on the public MLS.
Once an offer is accepted, it is presentedto the Judge in court.
> Court Auction
If there are no bidders in court at that time, the sale will be completed. If thereare other bidders present, it is sold to the highest bidder even though there isan accepted offer from the buyer who came
from a realtor. Therefore, the price may get bidded too high and the buyer must buy the property
without any conditions (with cash).
> The Best Time To Buy Foreclosures
If you have a way of knowing about a pre-foreclosure situation, then by all means, offer a solution to the seller. However, at this stage, the seller, like Joe in this case, may be just thinking about selling, but not that motivated – yet. Also, they are not that accessible, you would most likely have to know the seller personally.
The foreclosures on listings sites such as canadaforeclosurelist.ca are in the REDEMPTION PERIOD
before they are foreclosed on and after they miss their mortgage payments. This is the perfect time for you to approach the sellers because they are much more motivated to sell which gives you the chance to buy the property at a significantly reduced price.
And this is before it gets listed on the public MLS and before it is auctioned at the courthouse, which protects you from being outbidded by someone else – evenif only for $100 more.
Also, you can buy the property normally with a mortgage and with conditions, unlike a court auction which requires you to pay in cash.
More info on BC foreclosure Listings.
