What is a foreclosure?
By definition, a foreclosure is “the action of taking possession of a mortgaged property when the mortgagor fails to keep up with the mortgage payments”.
Essentially this means that the homeowner failed to keep up their end of the agreement by not making the mutually agreed upon mortgage payments. The foreclosure process can take months to make its way through the court system, sometimes even years. In general, the foreclosure proceedings will not commence until the borrower has missed 3 or more payments on the mortgage. Once the bank has taken back possession of the property, the bank will re-list the home for sale on the open market. Many people are under the assumption that these homes are always a “bargain”; however, this isn’t always true. The bank will do a formal appraisal of the property and take into account numerous things such as market value, location and the actual condition of the property. Once the home is sold, the proceeds will go to pay the remaining amount of debt owing to the bank that held the mortgage. The remaining proceeds, if any, will then be released to the original home owner minus any legal expresses, taxes or anything else owing against the property.
If you’re thinking about buying a foreclosure, WE CAN HELP! We have years of sales experience in the Calgary and area market. We have the knowledge and tools to help you make an informed decision about buying foreclosed properties.