When deciding to invest in a foreclosed property in Calgary, you need to understand the differences between bank-owned and court-ordered foreclosures. These properties indeed come with the best investment opportunities, but each type of foreclosure has its share of advantages, challenges, and processes that affect your purchase experience. So, let’s get to know how bank-owned and court-ordered foreclosures differ from each other.
Bank-Owned Foreclosures
These are the properties that have been through the foreclosure process, and at present, the property belongs to the bank. Now, it is the duty of the banks to recover their losses by selling these properties at the earliest. However, there are benefits and challenges associated with it, such as:
Advantages:
There are several advantages that you should know.
- When a bank takes ownership of a foreclosed property, it can sell it immediately. Thus, the sale process can be completed without any further delay.
- If the property has been lying unsold in the market for a long time, the banks make the negotiation process on price, repairs, or closing costs flexible.
- The buying process also becomes streamlined and straightforward, as the court is not involved in the ongoing proceedings.
Challenges:
You cannot overlook the challenges associated with this process.
- The foreclosed properties are sold “as-is” as no repair or upgrade is done, and there are no warranties, so it is highly expected that potential issues will emerge with time.
- The banks might provide limited disclosure regarding the property’s condition, so it becomes necessary to hire a professional for the inspection service.
Court-Ordered Foreclosures
In Court-ordered foreclosures, the properties are sold under court supervision, ensuring fairness to all parties involved, including the homeowner.
Advantages
Let’s find out what the advantages are.
- When the court owns the property, it gives buyers additional confidence that the process will be fair.
- The property price is set quite low, as the competition is few, cutting the need for potential bargains.
Challenges
There are several challenges that you should know about.
- Buying a court-owned foreclosed property requires a lengthy process, including court approvals and legal procedures, which makes the entire process quite slow.
- There is no chance for negotiation or opportunities for price adjustments, as a court-owner foreclosed property has rigid offer terms.
- The sale can be void at any time, creating uncertainty, as the homeowner can pay off their debts and regain the right to reclaim the property.
Key Considerations for Buyers
When it comes to the property foreclosure process, whether bank-owned or court-owned, there are certain factors that every homeowner needs to be aware of.
- If you are looking forward to quicker transactions, you must choose a bank-owned foreclosed property, but if you have patience, you can choose court-ordered sales, which take longer legal timelines to clear out.
- When a bank-owned property is chosen, you get more negotiating opportunities, but you have to follow stricter rules for court-ordered sales.
- If you are comfortable navigating legal processes and prioritizing price, then court-ordered foreclosures might suit you.
Final words
When dealing with foreclosure property, it is always advised to work with an experienced realtor who is familiar with foreclosure sales and can help you navigate the complexities. You must also allocate the funds for repairs as the foreclosed property is sold “as-is.” Understanding the market is essential to making informed decisions, especially when you are one of the house buyers in Calgary.
