Purchasing real estate at market value these days is different from purchasing real estate 30 years ago. Today, most real estate investors benefit from real estate by purchasing below market value. The way to purchase undervalued properties is to find distressed owners who are willing sell their property below market value. Under valued properties are the cash cows of the real estate market.
Being a Professional Real Estate Investor, one should have thorough knowledge about Foreclosure process in Canada. The word “foreclosure” is a nightmare for the property owner as well as for the Lender.
It happens all the time, regardless which cycle the market is going through, although the numbers do tend to go up during the Real Estate bust cycle.
Foreclosure Process Canada
Foreclosure is a legal action that a money-lender can take if the person who borrowed money using a mortgage stops paying back that mortgage. Foreclosure allows the lender to take or sell that person’s house by first getting a Court’s permission to do so.
As a Canadian Real Estate investor when a property-owner misses a mortgage payment or makes a late payment, the property owner will not automatically lose their property. Lenders don’t want to foreclose if they don’t have to because it is expensive and is a lengthy process. A lender will probably not start to foreclose until two or three months after the borrower has stopped paying. Normally, a lender will first send letters demanding payment. Then, if they don’t receive a reply, the lender will usually start to foreclose and to sue at the same time
The foreclosure process differs from province to province in Canada.
In Canada Real Estate investing there are two main ways for the lender to recover the mortgage debt. They are :
1. Judicial Sale
a. Conducted under the supervision and authority of the Court
b. Lender must apply to the court to get permission to sell property
c. Extensive Court involvement in every step
d. Process involves lawsuit against borrower and other liable parties
Judicial Sale are Primarily used in:
• British Columbia
• Nova Scotia
2. Power of Sale
a. Allows lender to sell property without the involvement of the court. This particular method was created to keep the recovery process out of the court system and created the ability to make it happen at a much quicker rate than a foreclosure.
b. The Process is started by sending a notice to the borrower.
c. Deficiency Judgment: lender must seek action against borrower after property has been sold
Power of Sale is primarily used in:
• New Brunswick
• Prince Edward Island
Generally speaking, foreclosure is a losing proposition for all the parties concerned. The number of mortgage defaults varies from market to market, and there is no data available to demonstrate the exact figures. In Canada Real Estate investing , there are over 1,100 mortgage lenders, approximately. The five major lenders report a 0.26% to 0.65% default rate.
World Wealth Builders offers many unique, practical, “out of the box” real estate investor apprenticeship which offers the student hands on, in the trenches style instruction to facilitate both a different mindset as well as a successful and lucrative real estate investment business. You can attend Real Estate Millionaire Lease Option Apprenticeship online or in person. To find out more, please go to www.WorldWealthBuilders.com/live.html
The above information is provided as a guideline and is not intended to give a professional legal advice. Please consult a Real Estate lawyer for their opinion on your particular case.
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When an appraiser goes to determine the fair market value of a property, they will use different approaches (or methods). If you are dealing with single family houses, you’ll probably only see appraisals that use the Comparable Market Analysis (CMA). You may find that how you determine the value is lot more different than professionals
Many of you don’t realize how lucky your grandparents/parents were in the 1970s. They were able to purchase a much bigger home than the one you have now, with a much bigger property, but for a much lower price than you would pay today. Are any of you wondering how this was possible? Well let me tell you how! You see, the average house in 1975 would sell for $57,581. After 1975 the price for an average home increased by almost $5,000 a year and in ten years the price almost doubled! The market inflated until 1989 when the average house would eventually sell for $273,698. So, if you would have bought a house in 1975 and sold it in 1989 you would have made more than $200,000 just for living in the house for 14 years. Just imagine if you had bought more than one house, lived in one of them, and rented the other, you could be rich! If only our ancestors were more aware of the housing market and inflation, even we their grandchildren could be benefiting from their success.
Why invest in Real Estate? Despite the economic ups and downs that we have experienced in recent times with stock markets, secure investments such as in the real estate market continue to offer you the greatest and most consistent opportunities to build wealth and financial security for your future. In the most basic manner the most advantageous benefit of investment in real estate is that by doing so, this provides a hedge against inflation.
Buying your own house will mostly be the biggest and best investments you may ever make in your life. As your pay down the mortgage you are also building equity in your home. This equity can be used to get the best rates on loans, or better yet, used as a down payment to purchase investment real estate! Imagine having other people paying your mortgage and building equity in your home while you use your hard-earned money for other endeavors.
Foreclosure Process in British Columbia Canada is legal procedure when the property owners fails to make mortgage payments and the Lender is in legal process to recover their investments.The word foreclosure means to deprive a borrower [in default] of the right to redeem the mortgaged property. In British Columbia, the foreclosure process it is a Judicial Sale.
It is also an extinguishment. In legal terms, this means to pay off and satisfy in full, or to nullify. In a sense, a foreclosure is like a divorce proceeding, where the borrower and the lender become divorced under the mortgage terms. All of the foreclosures in British Columbia are subject to Judicial Sale proceedings. The lender can apply to the British Columbia Supreme Court for a judicial sale, also known as Court-ordered sale, which will then be carried out under strict Court orders.
The foreclosure begins with a demand letter, which offers the property-owner a very short time-frame in which to pay out the mortgage. In simple language, the lender is saying that the property-owner must pay up, or get sued. The next step is a petition filed in the British Columbia Supreme Court registry, where the foreclosure action begins.
Being a Canadian real estate investor, it is important to know the whole process so that a real estate investor can assist the panicked property owner, as well as the lender to resolve the default.
The Order Nisi serves to establish the time of redemption. The redemption period is the time period in which the property-owner can redeem the mortgage, as well as the amount required. The redemption period is usually set at six months. There are exceptions where the redemption period can be reduced to one single day, subject to the approval of the Courts.
When a lender applies for an Order Nisi, they will apprise the Court of the current value of the property, and ensure that it is high enough to satisfy the cost of the sale and claim off the property-owner. If the property is sold by the Courts, the lender is entitled to recover the difference between the sale proceeds and the mortgage debt from the property-owner.
Once a lender has been granted a conduct of sale, they act in the role of the lender pursuant to the Court order, solely for the disposition of the assets. They also have the right to list the property with a realtor on MLS.
When a potential buyer wants to make an offer through the realtor, the offer is prepared and directed at one of the lenders. At that point, the realtor confirms that the potential buyer will be negotiating with the lender, and the deal may be possible once the offer is also presented in the Courts. The offer can be subject to a sealed bid process.
The foreclosure process in British Columbia can be very complex, time-consuming, and very expensive for all the parties concerned.
World Wealth Builders offers many unique, practical, out of the box real estate investor apprenticeships which offers the student hands on, in the trenches style instruction to facilitate both a different mindset as well as a successful and lucrative real estate investment business. To find out more, please go to www.WorldWealthBuilders.com/live.html
The above information is provided as a guideline and is not intended to give a professional legal advice. Please consult a real estate lawyer for their opinion on your particular case
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You have the permission to re-print this article, as long as you don’t make any changes and include the bio.
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Most Canadian real estate investors, both novice and veteran, are faced with situations that may be either stressful or perhaps they may not know what to do. Many deals as a result are passed on that otherwise could have become excellent, profitable deals. All the investor perhaps needed was the assurance the deal was good or just the guidance as to how to proceed.