Blog by Linda Book

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Topic of Interest - Foreclosures

Wondering How Foreclosures Are Sold In Vancouver, Canada

Important to know that the first accepted offer does not always get the property because even after an offer is accepted and subject free other subject free offers can be written.  What this means is that you can go to the expense and have the building inspection performed, obtain financing, obtain and read all the strata documents (where applies) and remove subjects but you may not get the property.

Our foreclosure proceedings in Canada are different from the United States.  Unlike the United States, our British Columbia court system is set up to protect the homeowner by trying to get the property sold as close as possible to fair market value.  This is not to say you may not save some $$$, but it certainly is not always the case. 

Viewing of foreclosed properties can be difficult as they are quite often still owner occupied and these owners are about to lose their homes and quite often more!

Any offers written on the property will contain a Schedule A, which amends the standard BCREA Contract of Purchase and Sale.  Once a buyer has his Realtor write an offer, on his/her behalf, the offer is then given to the Listing Agent to forward and present to the lending institution holding the mortgage on the property.  If and when the buyer and lender come to an agreement then the buyer will have reasonable time, like any offer, to remove any of the buyer subjects and provide a certified cheque or bank draft for the amount of the deposit.

Unlike regular offers that are subject free, this offer has to still go to court for approval.   The court hearing date will be 2 to 4 weeks away and is set up by the lender’s lawyer.  During this time the property can still be shown to other buyers.  These buyers will have the opportunity to find out what price has been accepted on the property and then they can have their Realtor write an offer for them, if they are also interested in buying the property.  Their offers must be subject free and are presented only to the judge at the court hearing.

At the court hearing all offers, which must be subject free, include a Schedule A and be accompanied by a certified cheque or bank draft, must be in a sealed envelope.  These are handed to the listing agent. 

The judge, in the interest of the owner, may first give the owner the opportunity to pay off the mortgage and any other charges that may have incurred.  If the owner is unable to fully look after this, then if there is more than one subject free offer, the judge will award the property to the highest offer.  Buyers, that really want the property, should take the time to be in court so they can up their bid, if needed.  The judge can also request changes to the content of an offer, in order to accept it, and that requires the buyer’s initials.

The completion and possession of a foreclosure will between 2 to 8 weeks depending on whether the property is occupied or vacant.