Thinking about purchasing a foreclosure? With consumer confidence on the rise, interest rates low and, unfortunately, enough foreclosures around, many are being tempted by properties that can potentially be gained at a below value price.
However, buyers need to be cautious of being caught unaware by the legal implications of purchasing a foreclosure. For example, lenders/vendors who have foreclosed on the house and are now charged with selling it are generally unwilling to make any representations to buyers about the state and condition of the property. In so called ‘normal’ conveyances buyers would typically receive at least a property disclosure statement with some assurances and statements.
After submitting an offer and having it accepted, some buyers may be surprised to learn that the previous owners of the home have remained in the house throughout the foreclosure proceedings…and are still in the home the day the buyers are ready to move in! The standard foreclosure contract states the sale is to still take place at the set time, however the buyers of the foreclosed property must give the lender/vendors a reasonable period of time (which could be days or weeks) to have the previous owners legally vacated.
Finally, the contracts of purchase used for foreclosures often state that the buyer will take the property ‘as is, where is’ on the possession date. This has been accepted to mean that the lender/vendor does not have to deliver the home to the buyers in the same state it was on the day the buyers viewed it. Buyers must never assume that any fixtures or appliances will be left at the property. Nor assume that the lender/vendor will be maintaining the condition of the property before the buyers take possession.
The above (which is not an exhaustive list of the potential risks and liabilties faced by a buyer) is not meant to deter you from considering a foreclosed property – there are many great properties that can be bought for a deal. If you have any questions with respect to buying foreclosed properties, please contact us to discuss your personal needs.
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637
Una Gabie: email@example.com
Jennette Vopicka: firstname.lastname@example.org
Danielle (Dani) Brito: email@example.com