Ask Kyle Court-ordered sales
Court-ordered sales can work in very specific situations, but they’re not a shortcut to easy money. Here’s how the process really works, whether you’re the buyer or the owner.
13 answers from 5 of my videos
It’s what most people call a foreclosure. The lender doesn’t just take the home and sell it: it has to petition the BC Supreme Court for permission to sell, and even after the lender accepts a buyer’s offer, the deal needs court approval before it can close. The court oversees each step so the property sells for fair market value, not just whatever the bank is owed. If you’re considering one, have a real estate lawyer walk you through it.
Not yet. Your accepted offer goes to the creditors and triggers a court date, and at that hearing anyone can show up and bid again. The accepted price becomes public, the judge reviews the offers and the highest bid usually wins, with no counter offers. So even a full asking price offer can be outbid in court.
Sometimes, but not nearly as often as people think. There has to be a trigger offer that’s accepted and deemed reasonable before the property even goes to court. If your offer isn’t, the process doesn’t start.
No. These sell as is, where is, so there’s no subject to inspection, financing, sale or strata documents. Your financing has to be locked in ahead of time, your inspection done before the hearing if they let you do one, and you bring your deposit cheque to court, usually 5% of your offer. Go in prepared to lose to a higher bid.
No warranties, no guarantees and no conditions. Sometimes the owner is allowed to stay in the home for the whole process, and someone upset about losing their home can take the appliances or damage the place, with no recourse for you. That’s why a vacant or brand new property takes a lot of that risk away.
I don’t think so. Court-ordered sales are really for veteran buyers who understand the risk and have deep pockets, like builders or contractors with access to trades. You can get something for a steal, but if it isn’t livable your budget can spiral very quickly.
Not always. Photos look better online, and some of these are virtually staged. On an older home where you can’t inspect first, the roof, windows, mold, a pool or asbestos could need seven figures of work, so you need a big contingency fund. The best deal isn’t always the cheapest one, it’s the one that doesn’t cost you twice as much six months later.
For buyersThe Motivated Sellers ListPrice cuts, relistings and homes sitting too long, the listings worth a real offer, updated weekly.See the list →Newer ones. If you can buy something newer there are a lot fewer problems: you’re not dealing with a roof or windows at end of life, and some still have home warranty coverage left. The ones to question are older homes where you can’t do your due diligence.
Get fully pre-approved with a mortgage broker who has done court-ordered purchases, because not every lender will fund one and yours has to close on the court’s timeline. You often don’t have time for an appraisal, so these suit buyers who may not need a mortgage and can take on some risk. Keep some cash on hand in case things go sideways.
The land title search, before I take a buyer to see it. I look for multiple mortgages, because a private second mortgage on top of a bank mortgage tells me the owner was stretched, then for CRA liens, builder’s liens or unusual charges, and on a strata, the Form B for unpaid fees. A clean title is a real deal; a messy one, I tell my client to walk away.
Fewer than you’d think. I’ve been calling around on some of these successful sales to ask how many people showed up to court, and there aren’t as many as you’d expect. If you’re the original bid and nobody shows up, you get the property, as long as your offer triggered the hearing.
Call a REALTOR® and a real estate lawyer this week, not next month. There are options to sell privately before the court process starts that can preserve your equity and your credit, and they disappear once the lender files its petition. The owners who lose are the ones who panicked in month one when they could have built a plan in month one.
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After missed payments the bank sends a demand letter, and if it isn’t caught up the lender files a petition with the BC Supreme Court. Then there’s a redemption period, usually about six months, which is the last chance to pay the debt or sell the home yourself, and after that the court can give the lender conduct of sale. Every case is different, so get a real estate lawyer’s advice on yours.
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