Initially it begins with a mortgage deficiency, a borrower fails to make mortgage payments as they become due. To protect lenders’ security, they have no choice but taking legal action. Once passing a redemption period varied from one day to six months granted by the court, a foreclosure action is launched by a lender against the borrower.
In most foreclosure actions, a court order for Conduct of Sale will be issued, which gives the lender the exclusive and legal right to list and sell the property along with the court approval at the hearing for the Order Approving Sale.
Unlike an ordinary sale, a foreclosure proceeding can be very specific. There are several things that interested buyers should always keep in mind:
First, although the lender will only bring one chosen offeror forward to the court for consideration, any other “unsuccessful” offerors may still be given a chance to present their bids in front of the master on the hearing date.
Secondly, the master can only approve an unconditional offer without any subjects attached, such as subject to building inspection, financing and insurance, etc.
Last but not least, when purchasing a foreclosure property, the buyer actually gets something called “as is where is”. Therefore, the ordinary clauses that deal with included items and property condition that should be in substantially the same at the possession date as when viewed by the buyer, must be deleted.
With some of the uncertainty during process, foreclosure properties are less likely for everybody. For sure, the listing price can be the most attractive, but in the meanwhile, unpredictable risks may increase, especially for the first time home buyers.