BARGAINS OR BUYER BEWARE?
The constant bombardment of the real estate marketplace with offers of "huge price reductions" off previous sale prices can be misleading.
Let's examine foreclosures:
Foreclosure in British Columbia is a process designed to sell distressed properties for fair market value. It begins when the home owner is unable to make the required monthly payments. The lender is required to wait until the loan is 3 months in arrears, then they apply to the court for permission to foreclose. The court will usually grant the borrower a 3 month redemption period to sell the property to satisfy the loan. If this is not successful the court grants the lender "conduct of sale." The property is listed with a REALTOR® on MLS®. Offers on the property can be accepted by the lender without consulting the borrower but must be "subject to court approval." During this time, (typically one to two weeks) between acceptance by the lender and approval by the court, the offer is on the public record. This is to encourage higher offers to be submitted. The court will consider all unconditional written offers received up to and including the court date.
The buyer is unlikely to get a bargain here because even if the lender has accepted a low offer, the court process will usually result in a higher offer being made at the court hearing.
Now the "Buyer Beware" part:
The offer when accepted by the lender and the court will be amended with a "Schedule A". This among other things will contain an "as is, where is " clause.
It will state that the property will be accepted by the buyer in whatever condition its in on the transfer date. The house you saw in good condition could be trashed. You have no recourse. Buyer beware indeed!
Let's look at developers 'blow out ' sales:
Don't get caught up in the hype. There are more than enough condos to go around. These condos are, for the most part, units that did not sell in the good times. They may be the left over least desirable units in the building. They might also be units that the "flippers" were unable to re-sell. Developers are not stupid. They will hang on to the best units until the glut of poorer units is sold off to you.
Beware the ads that say, Price WAS $$$ Price NOW $$$, a savings of $$$.
Do your homework! Make sure that "price was" is an actual sale price, not just an overinflated asking price which was too high in the hottest market. Your research might show that no one ever paid that much. "Price now," check today's market. Be sure that this is a bargain price and cannot be easily duplicated or bettered in the open market. Buyer Beware!
I have a client who says, "real estate deals are like trains. There will be another one tomorrow."
I say, there is no substitute for doing your "due diligence" before you buy!
Get your own expert help. The "expert" at the blow out sale is working for the developer, not you.
Central Okanagan Stats
Number of sales July 09/July 08
Type:..................SalesJuly 09...... Sales July 08....Incr/Decr.
SingleFamily:............231..................145............+59.31%
Apt/Condo:...............106...................74............+43.24%
Townhouse/Condo:..........64...................37............+72.97%
Average Sale Prices July 09/July 08
Type:..................Av.July 09........Av. July 08......Inc/Decr.
Single Family:.........483,183............502,887.........-3.92%
Apt. condo:............260,002............315,707.........-17.64%
Twnhse Condo:..........368,838............395,108.........-6.65%
(Stats courtesy of OMREB)
Summary:
The market appears to have bottomed in March/April 09 and be gaining strength since then. The number of walk-in buyers to Premier offices is increasing daily. Listing inventory is adequate, but has declined by 23% from July 08. Interest rates remain low.
A good time to buy, just do your homework.
Bert Chapman
Office: 6-3185 Via Centrale,
Kelowna, B.C, V1V 2A7
Phone: (250) 765-0570
TollFree: 1-866-765-0579
Fax: (250) 765-0577
Email: bert@pcrealty.ca
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