Looking for a home in Kelowna? Great! This is a beautiful place to live and offers the people here a slice of heaven. But as you search, you’ll probably find a few foreclosures in Kelowna. The price looks appealing. The potential seems high. And you’ve seen all those shows on TV with people buying foreclosed houses. Is it worth the risk to buy a home with a past history of being repossessed or closed down? There is more to it than what you’d expect, and certainly more involved than a standard real estate deal. This is all you need to know about foreclosures in Kelowna BC.
Basically, a foreclosure is a sign that something went wrong in the previous owner’s home history. Foreclosures are often the result of a lender reclaiming a property where the payments haven’t been made. Court-mandated sales are 90% the result of lack of payment in the previous owner. The new owner of the property becomes the lending institution, reselling the property to recoup lost finances in the foreclosure. The bank is the seller of foreclosures in Kelowna and all transactions go through the institution. They usually use an in-house agent for foreclosures, depending on the lender that initiated the foreclosure.
What triggers the lender to make a foreclosure? In British Columbia, the law states that 3 missed payments allow legal grounds to begin the process. Once the process begins, the right to redeem a property is no longer an option for the original owner and the property passes into the ownership of the lending institution.
The alternative to the lack of payment situation is an exception that crops up occasionally. It’s what’s known as a Judicial sale when the home is repossessed by the courts and the property is an asset that’s been seized. This is when the home has been deemed unsafe or been listed as a property with drug associations or criminal asset seizure.
In answer to this, it’s pretty much the same. Well, almost. In the case of the lender selling the property, the transaction is pretty much the same as you would see in a non-foreclosure agreement.
The best choice is to use a professional agent to help you through the deal. They have the knowledge and experience with Kelowna foreclosures to guide you to make the best decisions. Foreclosed homes in this city happen in every neighbourhood. It’s not restricted to lower-income neighbourhoods. It happens everywhere. In fact, the higher-income communities like Lakeview Heights, the mortgage repayments are higher than average. A sudden life decision like a job loss quickly overtakes the owner’s ability to repay and the property goes up for sale by the lender.
The main issue that we see with people looking at foreclosures in Kelowna is that they have a preconceived notion of how a foreclosed property works. This is often because of TV shows and media portraying the American system of foreclosures. Canada, and BC, in particular, is different.
In Canada, the opportunity to grab a very cheap property is almost negligible. That’s because there is a law that states that the repossessed home must be listed at “fair market value”, a value that you would find elsewhere. Contrary to popular belief, this isn’t a bank unloading an asset for anything they can get. The property is going to be around the same price you’d expect from any other sale. Forget what you’ve seen about grabbing a 4-bed house for under $50,000. Canada’s laws prevent that from happening.
• Type: Elected city council
• Body Kelowna City Council
• Mayor: Colin Basran
• MP: Stephen Fuhr
• MLAs: Steve Thomson, Norm Letnick
• City: 211.82 km2 (81.78 sq mi)
• Metro: 2,904.86 km2 (1,121.57 sq mi)
Elevation: 344 m (1,129 ft)
• Density: 601.3/km2 (1,557/sq mi)
• Urban: 151,957
• Metro: 194,882
Time zone: UTC-8 (Pacific Time Zone)
Because we normally deal with lending foreclosures and repossessed homes, the process isn’t going to change for you. The lender acts just like any other seller, negotiating offers and listing the property for what they’d expect to make on a normal sale purchase. And we recommend that you use a real estate agent with experience in Kelowna foreclosures to make sure that your home is what you’d expect.
But where things differ is in the judicial sale. The home has been repossessed by the RCMP and the house has been listed as a judicial sale. Things can get tricky. For one, the property is often listed “as is”, so that the condition of the home and the contents inside are all included in the sale. Estates sales work in the same way, but this is dealing with federal service instead of a private seller.
If the court-mandated sale of the home has been because of a grow-operation in the house, it is illegal to purchase the property with a mortgage. You must pay cash for the property. This is the case in Alberta and British Columbia. Plus, the home has to be cleared by the British Columbia Ministry of Health before anybody is cleared to live in it. It has to pass rigorous procedures and tests because of the past history of the home.
When you make an offer, it’s not simply passed on in the case of judicial sale. Your agent must make a court appearance to petition the bid before the Master, the ultimate decision maker for the sale. The ability to negotiate back and forth is reduced because of this formal procedure. The court is the decider on the purchase price and appeals and petitions must all pass through the Master, the only power of sale for the property. Be sure to have your agent go through the fine print of the sale, ensuring that all clauses and requirements are met before the final offer is made and approved.
There is often no guarantee or warranty that the house will be in the same condition on possession date that it was when you first viewed it. There is no recourse of action and you must agree to buy “as is where is”. In normal deals, you’d get a Property Disclosure Statement about the property. No such PDS exists in judicial sales. We’d advise walking through those properties with an inspector or a builder to get as much information as you can about the place before continuing down that journey.
Because foreclosures in Kelowna are much the same as any other deal, it’s simply through diligence and research to determine if the deal is worth it. You can certainly find a great number of options to live in great homes in Kelowna, but only if you’re absolutely certain of the house you’re looking at.
Know your market value before you head out. When you research a particular community like Glenmore to give yourself a good idea of what the homes are selling for. Determine the upgrade prices, the bedrooms, the price per square foot, and the days on market. You’d do this for any sale, so it doesn’t change when looking at foreclosures in Kelowna.
Keep a portion of your budget set aside for any repairs or restorations you’d need. For example, there are always a few homes on the market that have been foreclosed during the construction phase. The construction or restoration will need to be completed and has to be factored into your decision.
- Foreclosures Kelowna BC
- Why Do Homes get Foreclosed
- How Does a Foreclosure Work
- Buy a Foreclosed Home
- Avoid Bad Foreclosure Deals
And use a professional. I know this sounds biased written from an agent, but it’s the truth. Your Kelowna real estate agent will have a knowledge of the area, guide you to make competitive offers and have a good grasp of what properties on the market would appeal to you. Take advantage of the ease and transparency of the deal when you use a trusted agent. They will be on your side from the moment you say “Go” to when the closing date is past. Foreclosures in Kelowna can present some exciting opportunities. Let us help you find them