Kelowna Real Estate Blog – Paige Guernsey

Buying a Kelowna foreclosure

Posted by paige on November 23, 2011 | No Comments

HOW TO BUY A FORECLOSURE

There are many misconceptions in the buying public regarding a foreclosure.  Most think you can get a price on a house that’s far below market value. Not always so.

4 MAJOR STEPS

1) Know what you’re getting into

2) Getting your offer accepted

3) Court Acceptance

4) Possession

KNOW WHAT YOUR GETTING INTO

The Bank of Canada requires that foreclosing banks attempt to get the most amount of money for each property. This involves appraisals and real estate agents with market evaluations.  Homes that are well kept and/or vacant will usually receive a value close to the other homes in the neighborhood. If the home is in poor condition, this too will be reflected in “market value”.  I can help you determine what the best market value for any given property is, regardless if it’s a foreclosure or not.

Buying a foreclosure involves a Contract of Purchase and Sale and a Schedule A. The Schedule A spells out that the property is being purchased “as is where is” and that the bank does not make any representations or warranties about the house.  This paperwork is very different than a regular arms length transaction in what we’ll call a “normal” transaction between a buyer and a seller.   You should read it carefully and have a very clear picture of what “as is where is” means.

GETTING YOUR OFFER ACCEPTED

Working with a bank on offers usually takes quite a bit longer than working with a seller who’s looking to sell the home they are living in. Consider there may be a time difference and different levels of management the paperwork has to go through before any type of acceptance or counter offer is made.  Also, banks are generally closed on the weekends.  Banks generally get “low ball” offers and most often there is a lot of negotiating back and forth before price and terms are met that are mutually agreeable.  They don’t like to see a lot of “subjects” but it is possible to get an offer accepted with some subjects.  Any offer made to a bank on a piece of real estate has to also be “subject to court approval”.  This is because the court has the final say if an offer is accepted.

After your offer is accepted, and your subjects are removed, it’s filed at the appropriate law court and becomes public knowledge.  Most Kelowna foreclosures happen at the Kelowna Law Courts, but sometimes they’re in Kamloops or Vancouver. A court date is set after this step, and is most often about 2-5 weeks after the filing.

COURT ACCEPTANCE

On the day of court, I would HIGHLY recommend that you attend with your realtor.  Often other buyers will attend court with a sealed bid to present to the presiding Master.  These buyers will also have taken the time to check the court filing to find out the accepted offer price and usually their offer price will be higher.  This means that there are “competing bids” and if you’re wishing to be the successful bidder then you will have an opportunity to change your original offer.

The Master has the final say on which bid to accept and not only will be looking for the best offer price, but a sizeable deposit made by way of certified cheque or bank draft attached to the offer.  For possession, a successful bidders Contract of Purchase and Sale will usually read a certain number of days after court approval. For instance, it’s advisable to put “10 BUSINESS DAYS AFTER COURT APPROVAL” on the contract for Completion, Possession, and Adjustment dates.  This allows for regular banking hours and weekends.

POSSESSION

After all that, moving day is here!  Earlier we talked about the Schedule A and that there are no representations or warranties made by the bank.  Although moving in on possession dates usually go smoothly and hold no surprises, it’s imperative to understand that there is the possibility that the house won’t look the same as when you viewed it last. Occasionally disgruntled homeowners may do damage on moving out or take unexpected things like kitchen cabinets!

With so many details surrounding foreclosures, it’s critical to work with someone who knows the process.  If you’re considering purchasing a Kelowna real estate foreclosure, call Paige Guernsey direct at 250-862-6464. With many years experience around foreclosures and court ordered sales I can help you navigate the sometimes bumpty waters to a successful conclusion!  If you’d like a list of current homes for sale in Kelowna that are under foreclosure, send me an email at paige@kelownahome.com.

Talk to you soon…

Paige

Townhomes with no STRATA CORP?

Posted by paige on November 10, 2011 | No Comments

STRATA REAL ESTATE

Kelowna has a healthy inventory of strata real estate properties available.  One of the biggest complaints I hear these days about strata is that there can be a heavy hand when dealing with pets and rentals.

MLS LISTINGS

When trolling through Kelowna’s listings you’ll almost always see some sort of rental restriction as well as a size restriction for pets. Sometimes no pets area allowed at all.  This can seriously affect your ability to sell your property when the time comes.  One may argue that you bought at a price that reflected these restrictions and because of this restriction it’s a wash when you go to sell.  If things were different, it may not be so.

RENTAL RESTRICTIONS

A primary issue for Strata’s is rental restrictions.  Strata corporations have the ability to limit or restrict rentals in not only Kelowna, but through BC under the Strata Property Act.  In parts of the US and Europe, their type of governing can be completely different allowing for individual units to be owned freehold without any governing body like the familiar Strata Council. Therefore making each and every owner responsible to city by-laws just like a regular single family dwelling.

PET RESTRICTIONS

Another concern for buyers and sellers of real estate is pet restrictions.  Interestingly in Vancouver, there are very few pet restrictions due to the fact that prices are so high and affordability is a huge issue forcing many buyers to be looking at strata units.   A large number of young people buying their first place, families, as well as older people with empty nests in have beloved pets that they won’t part with.  I also think most people will agree that pet owners, for the most part, are responsible owners who are respectful of those living, working, playing around them.

IMAGINE CHANGING THE GUIDELINES IN KELOWNA

Imagine if you could buy a zero lot line attached home with no strata fees or strata by-laws etc.  This would open up the potential buying pool for hundreds of sellers right now as well as increase affordability and inventory for those currently looking to buy with pets or rental requirements.  Investors could buy without concern about rental restrictions providing affordable housing for the many who find it difficult to find suitable rentals. Pet owners could choose from a wider inventory pool without owners who have no pets losing any ground to potential pet problems next door.  Sustainability is another key factor here.  With less urban sprawl, we can encourage more people to be living, working, playing, and commuting  in “downtown” areas with fewer restrictions. Check out this fantastic strata townhome listing at 6-1853 Edgehill, Kelowna that can be rented and allows pets with generous restrictions.

This interesting article in the Vancouver Sun illustrates how this can be down and how it can change how we look at Strata property. Check it out and see what you think!

VOTE FOR SUSTAINABILITY NOV 19TH

Also, with our civic elections around the corner, it might be interesting to put these ideas forward to our council.  There are many that have sustainability on their radar, but these three are my favorites. They have great ideas on how to create sustainable and environmentally friendly growth that benefits everyone in Kelowna or the Okanagan Valley. Check their sites out and be sure to vote on Nov 19th!

Angela Reid-Nagy ,

Colin Basran

Michele Rule

If you’re looking to buy or sell strata real estate in Kelowna, are thinking of making an investment, or are interested in sustainable real estate call Paige Guernsey direct at 250-862-6464.

Talk to you soon…

Paige