Judicial Properties
- Thread starter AminMurji
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- Dec 23, 2010
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I've never heard the term Judicial Sell before but I'll assume that they are similar to to bank owned or foreclosed properities. Do not think that you are going to be getting a great deal on these types of properities the rules are different in Canada than the US, were the US banks just try to cover the outstanding mortgage.
In Canada the seller (bank) is required to sell the property for close to market value. The seller is not going to bargain for top dollar for the home so you can end up with a sligh discount. But it's very common for the bank gets it's money and the prior owner to get a cheque as well.
In my experience the hassle of acquiring one of these properities is not that great other than it taking between 2 & 5 business days to get a deal.
In Canada the seller (bank) is required to sell the property for close to market value. The seller is not going to bargain for top dollar for the home so you can end up with a sligh discount. But it's very common for the bank gets it's money and the prior owner to get a cheque as well.
In my experience the hassle of acquiring one of these properities is not that great other than it taking between 2 & 5 business days to get a deal.
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- Aug 30, 2007
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- 13,881
There are some discounted LAND deals, and also over-mortgaged (now bank owned) single family homes.
It is absolutely worth it to check out what courts have for sale, however, just because it is a court ordered sale doesn't mean it is great necessarily. In Canada most "judical sales" [also called court ordered sale in Canada] are done through a realtor and look like ordinary sales on MLS !!
Like any MLS listed deal .. there are some great bargains out there .. and many average or overpriced ones !!
Also, you have to submit an unconditional deal usually in an "as is, where is" state .. so this increases your risk ! Therefore the price discount has to seen in light of this increased risk. In some land deals I have seen it is worth it .. in some house deals it may not .. but certainly worth checking out.
There is no "for sure" deal anywhere in Canada. Evry deal has some warts .. some small, some huge. It is the investors resposnibility to do enough research aka "due diligence" to ensure the price paid is fair or excellent given the size of the warts !
Complex problems have simple, easy-to-understand, wrong answers !
Purchasing properties is one such complex problem !
It is absolutely worth it to check out what courts have for sale, however, just because it is a court ordered sale doesn't mean it is great necessarily. In Canada most "judical sales" [also called court ordered sale in Canada] are done through a realtor and look like ordinary sales on MLS !!
Like any MLS listed deal .. there are some great bargains out there .. and many average or overpriced ones !!
Also, you have to submit an unconditional deal usually in an "as is, where is" state .. so this increases your risk ! Therefore the price discount has to seen in light of this increased risk. In some land deals I have seen it is worth it .. in some house deals it may not .. but certainly worth checking out.
There is no "for sure" deal anywhere in Canada. Evry deal has some warts .. some small, some huge. It is the investors resposnibility to do enough research aka "due diligence" to ensure the price paid is fair or excellent given the size of the warts !
Complex problems have simple, easy-to-understand, wrong answers !
Purchasing properties is one such complex problem !
- Joined
- Mar 2, 2011
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- 3
We have purchased a foreclosed property from the courts in Alberta. It was a very difficult proccess and we would more than likely not do it again. The stress was not worth the proffits. It also took close to 3 months to know if we actually got the deal approved. Our deal had to be free of any subjects (FIRM) and the worst part was you buy it where is, as is. That means no inspections etc. It was explained to me that buying court ordered sales is very different in Alberta than in B.C. so you may want to look into the different provincial laws associated with court sales. Good luck. 
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- Mar 2, 2011
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Yes, we were able to view the property once. We had to conduct our own inspection. No independent inspections were allowed. And yes, our deposit was tied up for a long time. It takes that long to go through the court system when the current owners are disputing things so as to drag it out. This way they have more time before they are evicted. At one point I wanted to walk the deal but the wife insisted we continue. Our initial estimate was $90k in renovations needed. We ended up spending $170k but recaptured that due to the market increasing. Thank god. We ended up doing very well on it but that was primarily due to being lucky and the market increasing significantly. It could have been a lot worse. If buying foreclosures you really need to know your stuff. Be carefull. We have sinse stuck to conventional purchases.
Live and learn. These situations make us smarter the next time.
We have sinse stuck to conventional purchases.Live and learn. These situations make us smarter the next time.
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- Feb 5, 2011
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- 134
The other issue is that if and when your deal is accepted by the courts then you need to come up with the rest of the money in 30 days otherwise you lose your deposit. The banks will not give you a pre-approved mortgage on a judicial sale. Unless if you have cash sitting around and you are getting a heck of good deal it may not be worth the trouble.
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- Feb 18, 2008
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I'll speak on the Alberta experience (since that's where I'm from).
There's two different types of properties here: Judicial Listings (Court of Queens' Bench) and Bank Owned Properties. The former are difficult to buy, the latter have more potential.
Imagine the sellers' name is Rob. He's owned the house for a while, but recently went through an ugly divorce and managed to trash his credit rating. He can't get the renewal on his mortgage, and isn't making $200k a year in the oil patch anymore. Since he can't pay, the bank files for foreclosure at the Court of Queens' Bench.
After giving Rob a lot of chances, the Court puts the property up for sale. They are unwilling to accept less than market value (since they're still on Rob's side, not the banks). Eventually the bank can take back the property, or buy it for market value. That's less common, since the banks aren't in the business of real estate investing.
To buy from the Court you need at 10% certified deposit and an unconditional offer (schedule A attached). Since the courts will pay your Realtor, it makes no sense to try and do this one yourself. You're very unlikely to get a below-market deal since the Courts don't want to force Rob to take a loss.
However, once the banks have title back, they're able to sell it, demolish it or keep it. They are also sometimes willing to sell at a loss, or provide financing where you might not otherwise get it. Your offers will still have to be unconditional or have fewer conditions, but this is the sandbox where you can play and make some deals.
There's two different types of properties here: Judicial Listings (Court of Queens' Bench) and Bank Owned Properties. The former are difficult to buy, the latter have more potential.
Imagine the sellers' name is Rob. He's owned the house for a while, but recently went through an ugly divorce and managed to trash his credit rating. He can't get the renewal on his mortgage, and isn't making $200k a year in the oil patch anymore. Since he can't pay, the bank files for foreclosure at the Court of Queens' Bench.
After giving Rob a lot of chances, the Court puts the property up for sale. They are unwilling to accept less than market value (since they're still on Rob's side, not the banks). Eventually the bank can take back the property, or buy it for market value. That's less common, since the banks aren't in the business of real estate investing.
To buy from the Court you need at 10% certified deposit and an unconditional offer (schedule A attached). Since the courts will pay your Realtor, it makes no sense to try and do this one yourself. You're very unlikely to get a below-market deal since the Courts don't want to force Rob to take a loss.
However, once the banks have title back, they're able to sell it, demolish it or keep it. They are also sometimes willing to sell at a loss, or provide financing where you might not otherwise get it. Your offers will still have to be unconditional or have fewer conditions, but this is the sandbox where you can play and make some deals.
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- Mar 2, 2011
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- 3
Very well said Chris. Thanks for the clarity