Foreclosures, Not for the Faint of Heart and Not for First time Home Buyers
by Geraldine Santiago
AUTHOR and REALTOR
When people think of foreclosures, they think it is synonymous with ‘bargain’ or ‘cheap’. But when you are buying real estate in Vancouver BC, this isn’t necessarily so. The foreclosure process is not for the faint of heart, nor for first time home buyers.
For one thing, unlike a regular sale, chattels (appliances such as dishwashers, stoves, washers and dryers, etc. as well as window coverings) are included in the purchase price. In a foreclosure, chattels are not included at all. Previous owners can take away their appliances if they wanted to, and the new buyers will have to replace them.
For another, there is no property condition disclosure statement (PCDS) attached to the sale of the property. In a regular sale, buyers can be assured that there is some type of recourse if there was any misrepresentation or warranties that were not honoured.
However, in a foreclosure, the buyer is accepting the premises on an ‘as is, where is’ basis on completion of the sale. This means that the buyers acknowledge that there are no warranties or representations expressed or implied regarding the property.
And lastly, a first time home buyer may avail of ‘no down payment programs’ when purchasing a home. This is not the case with a foreclosed property. A buyer of a foreclosed property should have 5% at the very least as a down payment.
In a regular sale of a property, the offer and acceptance with the buyer and seller can take place relatively quickly. However, foreclosures in Vancouver BC oftentimes experience competing bids which are sealed and subject to court approval. This can be a long process where buyers are not only waiting for the paperwork and process to take its course, but also a process that might be more costly than buyers think.
The process of a foreclosed property is one that is not for the faint of heart, nor for first time home buyers, especially when purchasing in Vancouver BC.
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