The 9 Steps of Foreclosure Sales in BC! Some of you may run into a situation where you want to purchase a foreclosure property in BC. I have simplified the process into 9 steps to help clear up the court-ordered sale process.
1. The lender is given the right to sell the property by the BC Supreme Court. The lawyer acting on behalf of the lender hires a realtor to market the property. Please keep in mind that in BC the property can still be owner occupied and showing may be limited and sometimes difficult due to the nature of the circumstances.
2. The foreclosure property is listed on the MLS. Realtors will showcase that property to as many purchasers as possible in hopes to get an offer that is suitable to the lender.
3. A buyer agent submits a written offer, including a Schedule A (which amends the regular Contract of Purchase and Sale) to the listing agent. The listing agent will present that offer to the lender's lawyer and he or she will act of behalf of the lender during the negotiation. During this period the lender and the purchaser will negotiate a price they are both satisfied with.
4. Acceptance. Upon accepting the offer, the purchaser will have a certain amount of time set out in the contract of purchase and sale to do all their due diligence. After the buyer is satisfied with all due diligence, a certified deposit cheque or bank draft is deposited into a trust account. This is now a subject free offer as far as the buyer and the lender are concerned. However, there is one last subject which is "Subject to Court Approval".
5. The lender's lawyer will now set a court date and this could take on average 4 to 6 weeks time. A few days before court, the listing realtor will disclose the price which the offer was accepted for. That will give any other prosspective purchasers the ability to decide if they want to come to court and outbid the original offer or not. Unlike a regular property for sale, the first offer that comes in and is accepted by the lender is not necessarily the person who ultimately ends up owning the property at the end.
6. At Court the listing agent will collect all, if any, competing offers which must be subject free, contained in a sealed envelope, include a schedule A addendum, and be accompanied with a certified deposit cheque or bankdraft.
7. When the judge has this property address file in front of her, the judge may give the owner one last time to redeem the owner's mortgage and any other outstanding debts. If there is no attempt to pay off all the debts she will proceed with the offers to purchase the property.
8. Should there be multiple offers, whoever has the highest subject free bid in the sealed envelope will most likely be awarded the property. Depending if the property is vacant or owner occupied, the completion and possession could be after the court date will be somewhere between 2 to 8 weeks.
9. The property is now sold and all documentation is forwarded to the parties involved for conveyance.