As time marches on in this Vancouver Real Estate market we are going to see more and more Court Ordered sales that pop up. They can be a bit confusing and without the guidance of a Realtor who has been through one before it can be a little scary.
To the Buyer a court ordered sale is exactly like any other listing when it comes on the market. Showings are conducted by the listing Realtor to prospective Buyers and their agents.
Once the Buyer is ready to write an offer this is when the fun begins.
The propspective Buyer of a court orderd sale should realize right off the bat that the first rule of thumb is you are accepting the property in an as is where is condition. For this reason there are no inclusions on the offer and the Buyer must sign a Schedule A which states that the Buyer is accepting the property as is on possession day. You must accept the fact that you might receive the property with no appliances included, and all the current tenants material possessions, in rare cases. The only inclusions in a court ordered sale are a set of keys, again no one can guarantee how many keys are left out there so it is a good idea to get the locks changed as soon as you move in.
The offer is negotiated not with the old owner but the new owner who is probably a bank, trust company or credit union. There are the same subjects or conditions on the offer as there would be on any offer, of financing, building inspection, and strata documentation, if you are buying strata. The one catch is that the bank being the current owner, has never resided on the property so cannot attest to the condtion of the property. For this reason there is never a Property Condition Dislcosure Statement.
Once the Buyer has removed their conditions, or subjects, given their deposit to the Buyers Brokerage, and has a firm and binding deal, then the Listing agent and the bank who is the current owner, make an application for a court date.
This is the fun part. The current owner from the bank will make an appearance in court before the judge. In this particular market, all that happens is that the judge stamps some papers and the deal is done, usually before 9:15. All the new Buyer must do now is ready their monies for Completion.
In a faster market, or for a property that is very popular, there is always a possiblity that any other Buyer can show up in court with a subject free offer and scoop the first Buyer. In this instance if the first Buyer is scopped by the second Buyer who just shows up on the day, then the first Buyer can and will have their deposit released from trust.
For his reason, if I am representing a Buyer in a court orderd sale the first thing we do the night before the scheduled court date is to sit down and write and sign a blank offer, with no subjects or conditions. That way, if a second Buyer shows up in court on the morning we have an opportunity to contest and to produce another offer with a higher price then agreed upon, in effect having a multiple offer situation in court.
I always insist that my Buyers take the morning off work and come to court with me. It can be a very stressful experience and I always get a case of the butterflies just showing up in a court house, and knowing that I have done nothing wrong! If my Buyers are with me then we can all make quick decisions together, thus reducing the possiblity that we will loose the property to another Buyer.
In most cases court ordered sales are not a deal, and even though it looks well priced, it may end up being more expensive. The court will not just accept any offer. If it is a ridiculously low offer, it will not even have the opportunity to go to court. The offer must be in the ball park of fair market value.