A Sneak Peek into the Foreclosure Canada Market
Are you a first-time homebuyer? Do you feel investing in foreclosures houses in Calgary can be a profitable option? Well, then you should be all ears and understand what is happening in the Foreclosures market in Canada. Buying foreclosures in Calgary is not a rarity; however, it may also not be all that easy to find many options. Most lenders do not want to go through the time consuming and cumbersome process of a foreclosure sale.
Suppose you have made up your mind to invest in a Canada foreclosure house. In that case, you may also want to be aware of the legal implications and how to go about the whole process of buying foreclosures in Canada. This article will give you all the information you require to make you purchase a safe and viable one.
Understand the Type of Foreclosure Sale Prior to Buying a Foreclosed Home
Typically, the lenders can initiate foreclosures in two ways depending on the jurisdiction to which the property belongs.
Judicial Sale – This foreclosure process is done under the supervision of the court. The Banker or the lender has to get the court’s permission to gain the legal rights to sell the property. If the property you are looking to buy is situated in Alberta, Nova Scotia, British Columbia, Quebec or Saskatchewan, then the foreclosure process should be done in the Judicial sale approach. It is a time-consuming process as the court gives sufficient time for the borrower to come up with a payment plan.
The court gives the borrower about 20 days to file a defense petition and avoid foreclosure. When the borrower fails to respond to the summons or file a statement of claim or if he/she loses the case, the banker will be granted the permission to put up the house for sale. On the other hand, if the borrower responds and seeks to defend himself, the case can go on for a longer period.
Power of Sale – This is a faster process followed by Ontario, New Brunswick, Prince Edward Island, and Newfoundland. The power of sale clause is included in the mortgage contract, giving the lender the right to repossess the house if the borrower fails to pay up to a maximum of four installments.
In this arrangement, the lender can bypass the requirement of having the court’s permission to acquire the right to sell the property. Even in this scenario, the banker serves a notice asking the borrower to make the defaulted mortgage payments. The lender may allow about 35 days as a redemption period for the homeowner to pay up the dues, including the arrears, late fee, tax, and penalties.
In case the borrower does not pay up the arrears within the time given in the notice, the lender will send an eviction notice asking the homeowner to vacate the property within 30 days. Once the homeowner has vacated the premises, the house is put up for an auction or a traditional sale. Facing a foreclosure is not always desired by both parties; the bankers most often give them enough time to settle the payments.
Things to Look Out While buying a foreclosure home
Buying a home is not something that you often do, and it also involves a lot of money, time, and effort. If you are going in for a foreclosed home, you might want to be extra cautious as it does involve additional formalities, and you might also be required to do a lot of research.
Here are some of the key considerations you have to take care of before investing in a foreclosed home.
- Get a thorough listing of all the Foreclosures in and around Calgary from different sources- This is the first and foremost step if you have decided to buy a foreclosed home in Calgary. Get all the possible listings of properties that have been put up for sale after the foreclosure process. You can get the listings from many online sources or get the information from a legitimate local real estate agent.
- Seek Professional Advice – After you have gone through the listings, it is advisable to consult a finance and real estate professional to get comfort on the property’s value. Help from the pros will tell you if it is worth investing all your hard-earned money in the property. Some bankers or mortgage lenders may provide you the services of a realtor at no extra cost. However, you should have one to do the investment’s feasibility study after considering the current real estate market conditions.
- Inspect the property – We cannot emphasize the importance of this step. Remember that you will buy a property that was in the hands of a previous owner who was unable to meet his obligations. So do not expect the property to be in great shape.
However, a proper inspection of the property has to be undertaken either on your own or with the help of an expert. This will give you an idea of how much money you will have to set aside for renovation.
- Understand your expectations from the property – You should have a clear picture of what you intend to do with the property. If you intend to use the property as your family home, make sure you enquire about everything about the property, the neighborhood, amenities available to the residents, etc.
If you are looking at it as an investment option either to let out or re-sell, it may be worthwhile to research whether the location appears attractive to the tenants or potential buyers. Selling your home in a locality that is not very attractive to renters or buyers may pose a serious challenge, and you might end up getting a lower bid for the foreclosed property you just bought.
- Prepare yourself for the application process – Buying a home at an auction is no easy task, and we advise you to go through a legit company to help you with the technical aspects of the process. You might want to bring your mortgage to help finance the deal. Keep your financial and personal documents handy, make sure you have a good credit record if you are planning to apply for finance through the foreclosed property’s mortgage lender. You might have to be prepared to offer a good amount as down payment and also figure out on how you will be paying the installments,
Are you still skeptical about investing in foreclosed homes? You need not be, as it is just like owning any other home on the real estate market. Just that you have to be dead sure about doing your research and finding out every possible detail about the property. There is a possibility that you might get it at a price lower than that of a regular property. However, you need to be prepared to spend that extra money to restore it and make it your dream home.
We are here to help you with your finances; if you are looking to avail a mortgage, need cash for your down payment? Call us, and you will receive a positive response from our team and get back your dream home within 5 days by paying cash. Pick your phone and dial us immediately.