In BC, a foreclosure is sold through the court. You make an offer to the lender, negotiate a price, do your due diligence and remove your subjects, but the deal is still "subject to court approval." At the court hearing, usually 2 to 4 weeks later, other buyers can show up with higher sealed, subject-free offers, so the first accepted offer doesn't always win. Once the judge decides, there's no backing out.
Foreclosures have been a very popular topic lately, and buying one in BC works very differently from a regular purchase. Here's the whole process, so you know what you're getting into.
First, the basics
- It's sold as is. The seller, which is the lender, isn't responsible for the condition of the home, and there are no disclosures or warranties. You're agreeing to buy the home in the condition it's in on the day you take possession, not the day you viewed it.
- It's not automatically a steal. The listing agent's job is to get the best price possible for the lender. Foreclosures can even be listed higher than similar homes, and the price tends to come down the longer one sits.
- You don't have to offer full price. Buyers often come in low on foreclosures. The lender can counter, and you can go back and forth until you agree on a price.
The process, step by step
- You make an offer. It's a regular Contract of Purchase and Sale plus a Schedule A from the lender, which changes some of the standard terms. The listing agent presents it to the lender's lawyer, who negotiates on the lender's behalf.
- You agree on a price. The lender and you negotiate until you both land on a number.
- You do your due diligence, quickly. Once your offer is accepted, you have a limited time for things like a home inspection and financing approval.
- You remove your subjects. When you're satisfied and your financing is in place, you provide a certified cheque or bank draft for the deposit and remove all your subjects. As far as you and the lender are concerned, the offer is now firm, except for one last condition: subject to court approval.
- The court date is set. The lender's lawyer books a hearing, usually 2 to 4 weeks out. Your accepted price now becomes public, so other buyers can decide whether to show up at court and outbid you.
- Court day. The lender's lawyer collects any competing offers. Each one must be subject-free, in a sealed envelope, include the Schedule A, and come with a certified deposit cheque or bank draft. The judge may give the owner one last chance to pay off what they owe. If they don't, the judge considers the offers, and the highest subject-free offer will most likely be approved.
- Completion and possession. Depending on whether the home is vacant, owner-occupied or tenanted, completion and possession usually happen 2 to 8 weeks after the court date. All the paperwork then goes to the lawyers to finish the transfer.
The big difference from a normal sale
The first offer accepted by the lender isn't necessarily the one that ends up owning the home.
That's why it's strongly recommended that you go to court yourself. You can raise your offer there, with an amendment or a new first page of the contract showing your higher price, and you'll be there to initial any changes the judge asks for. There are no second chances after the judge decides, and no backing out of the contract.
A few practical tips
- Bring a copy of your deposit cheque or draft, so you're not chasing the lawyer afterward to get your money back if you don't win.
- Get your inspection and financing done early. The timelines are tight and the home is as is.
- Decide your true maximum before court day, not in the courtroom.
- Court-ordered sales aren't covered by BC's 3-day rescission period, so there's no cooling-off window.
Thinking about buying a foreclosure? It's a process where having someone who's done it before really matters. Book a buyer consultation, or get my free Buyer's Guide.
General information only, not legal advice. Court procedures can vary by case; get advice from your lawyer before making an offer on a court-ordered sale.