Three important things to know when buying a foreclosure in “As Is” condition from the banks or the courts are:
- Buyers take all the risk
- Lenders typically won’t finance “As Is” properties
- “As Is” Includes Nothing.
Buyers take all the risk in exchange for a discount on the price.
That would be the basic premise of buying a foreclosure. The seller is, in most cases, the bank or the courts. The foreclosure sellers have not lived in the property. They have limited knowledge about the property, so they use “As Is” to offset the lack of information a traditional seller would have an offer to the buyer. It’s up to the buyer to use all their own resources to mitigate the risk. The most valuable resource for buyers of Alberta Foreclosures is an experienced real estate agent like Jerry Charlton.
Lenders Do Not Like to Mortgage “As Is” Purchases.
Mortgage lenders have two risks they lend against. One is you, the buyer, and the other is the property they get as security. Banks like to take almost zero risk in exchange for low mortgage interest rates. It’s not impossible to finance foreclosures, but it is for most people. Courts will not consider any Offers To Purchase a Foreclosure with conditions like financing or home inspection. Banks are a bit more flexible about conditions. The rule of thumb with foreclosed properties is Cash Is King. Whoever makes the best Cash Offer usually gets the property. This is where a great mortgage agent with access to many different lenders, including the traditional banks, can help you. Renting money is easy!
“As Is” Includes Nothing.
When you buy a home, you usually add into the contract the Stove, Fridge, Dishwasher, Washer, Dryer, Window Coverings, etc. Not so with foreclosures. Again, the sellers have minimal knowledge about the property, let alone the appliances. Therefore, the sellers of foreclosed properties do not include anything in the sale. What this means to a buyer is if there is a stove, fridge, etc., in the property on the day of the “As Is” possession, then the buyer gets to keep them. If the property is vacant, the appliances usually remain. If the property is occupied, the story could have a different ending.
A real estate agent like Jerry Charlton is the most essential resource a foreclosure buyer can have. He has helped buyers and investors purchase foreclosures for almost 20 years.