How to Buy a Foreclosure in BC

A very common question I get asked is, “What are the steps to buy a foreclosure in BC?” Buying a foreclosure in BC is very similar to buying any other house except it needs the court’s approval to complete the sale. I’m going to take the guesswork out of buying a foreclosure in BC and give you the step by step process! Below is a step by step instruction guide on how to buy a foreclosure in BC.

11 STEPS TO BUYING A FORECLOSURE

1. Find a foreclosure you are interested in buying and contact a foreclosure expert (like me! Email [email protected] or call 778-715-9988)

2. Submit an offer to the owner (if the home is a foreclosure, the bank takes back ownership)

3. Get your offer accepted by the bank. You will then have a chance to do a home inspection, get financing approved, etc.

4. Once you are satisfied with the home inspection and any other conditions you included in your offer, you can remove your subjects and give your deposit. Once you do this, the deal is firm.

5. Once you have a firm deal, the bank will request a court date to approve the sale, which usually takes roughly 2-4 weeks.

6. While waiting for the court date, interested buyers can still view the property and can also find out your accepted offer price.

7. If another buyer likes the property and is willing to pay more than your accepted offer, they can come to court on the scheduled court date and submit an offer.

8. If you are the original offer and you are the only one to show up in court, the judge will look at your offer and approve the sale. Lucky for you, no one showed up to compete against you!

9. If you show up to court and there are a few other people interested in the same property, you will have one last chance to increase your offer and submit it to the judge in a sealed envelope. The other interested parties will also have a chance to submit an offer in a sealed envelope at the same time, but their offer cannot have any subjects. They will have to take care of financing, inspections and anything else before the court date.

10. The judge will then open all offers at the same time and will look at the following:
    
    THE PRICE
    THE COMPLETION DATE
    THE DEPOSIT

11. The judge will then decide based on those 3 items, who has the highest and best offer and approve the sale to that buyer.

The buyer with the highest price isn’t necessarily the one who will win. When the bank takes control of a house, it costs them money each day to maintain it. They will be paying for heat, hydro, maintenance fees and a property manager to take care of the property.

Let’s say I am the original offer that gets accepted by the bank and we get a court date. My accepted offer price was $300,000 and I want to take possession 21 days after court approval. If someone else shows up to court and offers $300,000 and wants to take possession 10 days after court, the judge would consider that a better offer. It costs the bank on average between $40-$80 a day to keep that house on the market. The judge won’t only be looking at the price and take-over dates, they will also be looking at the size of the deposit. A big deposit is always a good way to show the judge how serious you are, and will increase your chances of winning in court.

I hope this will help you understand how to buy a foreclosure in BC.