Are you in the market to purchase a home in the Edmonton area? Have you come across listings that state the property is “In Foreclosure'' or a “Judicial Sale”? These types of properties can be good opportunities for individuals looking to purchase properties with equity building potential.  There are however, some important details that buyers looking at these properties should consider.

When a property is a “Judicial Sale”, it means that the sale of the mortgaged property is under the intervention of the court system. Some of the reasons that a property or property owner would be in this situation are as follows:

• The outstanding property debt cannot be resolved

• The borrower/owner has become insolvent

• The borrower has defaulted in mortgage payments and cannot afford to continue

• There has been an appraisal completed on the property and there is equity left in the home after mortgage, taxes, and legal fees have been paid out.

The “Judicial Sale” process is somewhat more complex and involved then buying a property “In Foreclosure”. The reasons for this is that at times the seller is still living in the property, numerous parties are involved (lawyers, banks, realtors, appraisers), with court dates and other protocol to follow. The courts also prefer seeing accepted offers (potentially multiple) without due diligence conditions (Financing, inspection etc.), as once the accepted offer has been stamped in court the property is considered sold. The buyer does have the ability to complete their due-diligence on the property to their satisfaction, however it must be completed ahead of submitting the offer to the courts. 

When a property is “In Foreclosure”, or “Bank-Owned Foreclosure Sale”, the lender has taken control of the property to secure monies owed. Some of the reasons why a home would go into foreclosure would be as follows:

• The owner has been released or has quit their job

• There are medical conditions preventing the owner from working

• Debt levels and outstanding bills are unmanageable 

• The owner has had a job transfer to another province or city

When properties are “In Foreclosure”, the sale of these properties are generally more straight forward than “Judicial Sales”. Financial institutions often allow due-diligence conditions  such as Financing and Property Inspection. There are also no court dates required for these offers to be considered, so there is more certainty with closing/possession dates. 

“Foreclosure” and “Judicial Sale” properties are often time good opportunities for a buyer to purchase a property with equity building potential. The properties are however sold “As is, where is”, and without any representations or warranties. There are also sections of the “Residential Purchase Contract” that contain clause insertions and deletions, which should be reviewed prior to writing an offer. These details should be discussed with your Realtor, Lawyer and Mortgage Broker, prior to proceeding with the purchase of a “Foreclosure” or “Judicial Sale”. 

Should you have any further questions about “Foreclosure” and “Judicial Sale” properties, please contact Ryan Philipenko of RE/MAX Real Estate. Ryan will also be able to guide you through the process of this type of purchase, and also present MLS listings in the Edmonton area that match the criteria of your desired search. 

Ryan Philipenko |  RE/MAX Real Estate 

780 504 6674 | www.philipenko.com | ryan@philipenko.com

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