Buying a Foreclosed Property
When attempting to purchase a foreclosed property, it is very important that the buyer understands the process that is associated with a judicial or court-ordered sale.
The process in general is as follows;
A home owner is issued a demand letter from their lender which provides them a short period of time to pay for their outstanding mortgage balance.
Following this, the lender then files The Order Nisi which fixes the period of time which the outstanding funds must be repaid. This period is usually six (6) months in duration and is formalized as it is filed with the B.C. Supreme Court.
Once the lender has satisfied the court that the value of the property is at least enough to cover the amount owed, they are granted a conduct of sale and are permitted to pursue the sale of the property.
If a buyer is interested in purchasing the property, the purchase process operates just as any other property through an offer with the necessary conditions requested.
The trick comes that even though a deal may be reached between the buyer/realtor and the vendor (lender), when the offer is presented to the court it may be rejected or the property may be forced into a sealed bid process. The process of the court is as follows:
- The lender’s lawyer presents the buyer’s offer to the court.
- The lender’s lawyer asks if there are any other parties in the courtroom who wish to submit an offer.
- The best deal is then to be awarded the property based on the review by the lender’s lawyer.