What You Need to Know Before Buying a Foreclosure in Calgary

Buying a foreclosure property in Calgary can be an enticing opportunity to purchase a home at a potentially discounted price. However, it's essential to approach the process with caution and be aware of certain factors that are specific to buying foreclosures. 

Before embarking on any homebuying journey, make sure you have the professionals you need behind you. Contact us any time to learn more about homes for sale in Calgary and how we can help you reach your real estate goals in 2023. 

Understand the Foreclosure Process

Familiarize yourself with the foreclosure process in Alberta. Foreclosure occurs when a homeowner defaults on their mortgage payments, leading the lender to take legal action to recover the property. It's important to understand the legal steps involved, including the role of the court, redemption periods, and potential delays that may occur.

Buying a foreclosure property will differ from a typical real estate transaction because you are working with a bank and the courts rather than just another individual party. This means you should be prepared for an unpredictable timeline.

Do Thorough Research

Don't just assume that the foreclosure you are considering is a good deal. Make sure you understand what you are getting yourself into by conducting comprehensive research regrind the condition of the home. Be diligent in reviewing property details, including the condition, location, and potential liens or encumbrances.

It can also work in your favor to hire multiple inspectors, or talk with some professional contractors after you get the inspection report to hear whether they would take on a home in this condition and what it will likely cost to update or repair. Foreclosures are generally sold "as-is," so it is possible to get a home that you think is a great deal but ends up needing more work than you can really afford. 

Secure Financing 

Financing for a foreclosure sometimes requires more prompt action than other real estate transactions. The more you can be ready to take quick action, the better. This includes being able to make speedy decisions and put in an offer as soon as you decide, thanks to being pre-approved. 

Make sure you have secured pre-approval with your lender before you begin the search for Calgary foreclosures, and talk with your lender about your plans to make sure you've done everything you can upfront to make a strong offer as soon as an opportunity presents itself. 

Consider Additional Costs

The cost of buying a foreclosure property may seem far lower than another comparable home, but that sometimes means that there is significant updating to be done. When you consider your housing budget, factor in all of the additional costs that might be associated with a foreclosure, like legal fees, property transfer taxes, home inspection fees, and any necessary repairs or renovations. Factoring in these costs will give you a more accurate assessment of the total investment required.

Be Prepared for Competition

Buying a foreclosure can involve a more complex and lengthy process compared to a traditional home purchase and requires extra patience.There may be multiple interested buyers, especially if the property is attractively priced. Be prepared to encounter competition and exercise patience throughout the negotiation and purchasing stages.

Consider the Market Value

Determine the market value of the property by comparing it to similar properties in the area. Consult recent sales data, obtain property appraisals, and consider hiring a real estate agent who can provide a comparative market analysis (CMA). Evaluating the market value will help you determine if the foreclosure property is priced reasonably and represents a good investment opportunity. We can help you assess what the home is likely worth, or even talk with an appraiser for another expert opinion.

To make a confident and informed decision about buying a Calgary foreclosure, here are some things to keep in mind.