Foreclosures in the US have been a buzz word for quite some time now, but does it apply to Canada as well? When it comes to foreclosures, the bank has taken control of the property due to non-payment and is attempting to recover their funds. Once an offer has been accepted, a court date is then set for the court to approve the sale. However, property in Canada must be appraised, and an accepted offer will have to be reasonable in relation to this figure, so rock bottom prices where the bank loses won't happen here. You may get a few $1,000 off, but considering the following factors, is it really worth the risk?
Once a price has been accepted, that number is publicized in order to get a few higher bids on court day, so there's still a good chance you can be out bid on the day and lose out on that bargain price. Accepted offers on court day are subject to the Schedule A designed by the bank, with no protection or conditions allowed for the buyer. What does this mean? "Buyer Beware" is the condition you accept the property in with the requirement to complete. So if the previous owner or tenant leaves the place in a bad state, appliances ripped out, pipes and flooring destroyed, then you're on your own. If the tenant refuses to leave, a Writ of Possession will be obtained by the bank and the required procedures adhered to, however, the timeline on this is unknown and no damages will be awarded to a buyer in this situation.
What are you guaranteed in this case? A clear title, so that's something! Perhaps your odds are better if you bid on a property that is already vacant. However, it's worth noting that until the property completes, the mortgagee still has the opportunity to redeem their mortgage and cancel the court process, unlikely as it may be. So, knowing all this, is it really worth the risks? All I can say is 'Buyer Beware'!