Foreclosure - making an offer

[Dabbler]

In the summer we looked a property that we wanted for our principal residence. Its a long story but it is now in the courts and in foreclosure. There are some variables with this property that have had us talking about it. Doe we want it? Since it has been relisted, the price has gone down considerably. We are told by our realtor that someone else has made an offer with subjects and they go to court in a few weeks. We apparently could still make any offer with no subjects in order to compete. We are obviously a bit leary of the legality of it all. Is it true that we could go and get preapproved for this property and actually make a offer without subject to financing if we have our preapproval? Something tells me always to put subject to financing even if you have your preapproval because "you never know". However, we can`t compete if this is the case. Has anyone gone through a foreclosure experience that they wish to share or any information we should be warned about. Those that have had no experience that we have talked to say "be careful".....but of what?!

 

[ShannonMurree]

Foreclosure is "buyer beware" and the property is "as is, where is". I don`t know if the property you`re considering is in BC so the laws may be somewhat different than here...maybe not.
I can`t speak for your Realtor (whom should be advising you) but I can speak on how I do things for my clients. I ALWAYS have my clients come in conditional (or subject to) financing and inspection no matter what. You, as the buyer have the right to know what defects, if any, on the property so you can make an informed decision. Coming in firm is way too much of a risk.

My first advice, speak to a lawyer about the legalities of it. Also here in Ontario, the original owner can still pay off the mortgage & outstanding legal fees right up to the time that you`re supposed to close.

 

[Dabbler]

QUOTE (ShannonMurree @ Nov 14 2008, 04:31 PM) Foreclosure is "buyer beware" and the property is "as is, where is". I don`t know if the property you`re considering is in BC so the laws may be somewhat different than here...maybe not.
I can`t speak for your Realtor (whom should be advising you) but I can speak on how I do things for my clients. I ALWAYS have my clients come in conditional (or subject to) financing and inspection no matter what. You, as the buyer have the right to know what defects, if any, on the property so you can make an informed decision. Coming in firm is way too much of a risk.

My first advice, speak to a lawyer about the legalities of it. Also here in Ontario, the original owner can still pay off the mortgage & outstanding legal fees right up to the time that you`re supposed to close.
Yes we are in BC. Our realtor has not had any exposure to dealing wiht a foreclosure. She is learning a long with us. I saw the mortgage broker today. She is confirming that our pre-approval will be on rate only and doesn`t gaurantee us financing however if we meet all the requirements, she sees there is no problem putting any subject ot financing. I am going to ask for a letter from the lender to give us peace of mind. I will also go this week to see the lawy for any advice. I`m sure is all well worth it.
Thank you for your repsone. Its appreciated.

 

[pcmyau]

QUOTE (Dabbler @ Nov 14 2008, 10:31 PM) Yes we are in BC. Our realtor has not had any exposure to dealing wiht a foreclosure. She is learning a long with us. I saw the mortgage broker today. She is confirming that our pre-approval will be on rate only and doesn`t gaurantee us financing however if we meet all the requirements, she sees there is no problem putting any subject ot financing. I am going to ask for a letter from the lender to give us peace of mind. I will also go this week to see the lawy for any advice. I`m sure is all well worth it.
Thank you for your repsone. Its appreciated.

Buying foreclosure is not suitable for everyone. Basically you are buying a property as it is where it is. You are recommended to ask your realtor to get you the title search, survey plan, and works order from the city if any to review before submitting your offer. Unless you are very familiar with building components and construction and/or you have had a chance to inspect prior to writting up your offer, you are taking a risk of buying some "surprise". In most of the case, the foreclosure sales do not gurantee that the contents (like appliances, furnitures) that you see at the showing will be there on completion, unless these items are written down as part of the sale in the contract. It is true that in foreclosure, they expect no subject. Getting bank`s pre-approval before writing an offer is recommended, even so be prepared to have a second option on your source of fund. You never know if the bank will really give you the money when you formally submit your mortgage application even they pre-approved it before. It is the same here in B.C. that the owner still has the very last chance to pay off the debt to prevent the foreclosure on the court day. Good luck.