Due to a number of changes that banks have made to mortgage documents, finding a non-qualifying assumable mortgage is now like finding a needle in a haystack. They are for all intents and purposes practically non-existent. Most lenders invoke the power of their new clauses and since people do not want to do battle with large banks, almost all deals end up collapsing. But this doesnít mean my team canít help you. If you canít qualify for a mortgage, maybe I can help you rebuild your credit, or introduce you to one of my many mortgage broker contacts who may be able to help you qualify for a mortgage at a slightly higher interest rate. And there are other deals out there, including private lender financing, rent-to-own properties, and vendor take-back mortgages.
If you have decided to buy a home your first step should be to get pre-approved by a lender. There are a few good reasons for this. Interest rates change. Once you are pre-approved, lenders will hold your rate for up to 120 days. If rates go down during this period, you will get the lower rate. If rates go up, you will still get the lower quoted rate. As well, when you are pre-approved for a mortgage you know exactly how much you can afford to spend on a home. That way, you will not over-extend yourself. Before you get pre-approved feel free to contact me. By understanding your unique financial situation, Iíll be able to determine if you are better off dealing with a big-five lender or your situation requires the expertise of a creative mortgage broker, who has access to a pool of lenders. I have many good connections with bankers and mortgage brokers and can refer you to the right person from the start, putting you on the right track.
A foreclosure results when a borrower defaults on mortgage payments. The sale of the property is to satisfy the payment of the loan. In Alberta, foreclosures are processed under judicial sale but the court ordered sale is carried out under the Court of Queen's Bench. A judicial sale is when the lender has the property listed for sale under the supervision of the court. If there are no offers from the judicial sale, the lender can seek an order of absolute foreclosure, thereby becoming the new owner. The foreclosure process is complicated and in many cases your ability to secure a good price will depend on what stage the process is at. It will also depend on your ability to recruit the services of a good realtor, whose expertise can guide you smoothly through the process.
If you decide you want to buy a foreclosure property there are a number of things to consider. Many people think they want to buy a foreclosure but once they learn all the risks involved decide this kind of purchase is not for them. When an offer is written on a foreclosure, the buyer must sign what is typically referred to as a Schedule A. These documents vary in content but essentially detail the buyer is accepting the property in "as is where is" condition and waiving any rights to litigation if they find on possession that the property is not how it was when originally viewed. It also outlines that the seller does not offer any warranties or representations with regard to the condition of the property or its mechanical systems. Foreclosures can be extremely complex and it is best to consult the services of an expert, and perhaps even obtain legal advice, before pursuing such a property.
Below is an example of a Schedule A form that must accompany any foreclosure offer. As I said, these forms differ in content depending on the lawyers involved but this example will give you a general idea of what to expect.
SCHEDULE A. The following terms and conditions shall apply to and shall form part of any agreement of purchase and sale to which this schedule is attached.
1. Where there is any conflict or discrepancy between the terms and conditions in this Schedule and the terms and conditions in the agreement of purchase and sale attached, the terms and conditions in this Schedule shall supersede and apply in place of such other conflicting terms and conditions.
2. Other than being required to provide a registerable transfer of land/title, the vendor shall not call for the production of, any other documents of any kind (except such as are in the vendor's physical possession), and without in any way restricting the generality of this, the vendor shall not be obliged to provide a survey, Real Property Report, Compliance Certificate, or condominium documentation.
3. The purchaser(s) shall not receive, from or on behalf of the vendor, a certificate of exempt supply of Real Property, or any similar assurances with respect to the Goods and Services Tax relating to the property. Any GST shall be paid by the purchaser(s).
4. The purchaser(s) acknowledges that no representations or warranties whatsoever have been made or are made or given by the vendor or anyone on its behalf to the purchaser(s), including, without limiting the generality of the foregoing, representations or warranties as to the condition of the property being conveyed to the purchaser(s), the absence of urea formaldehyde foam insulation (UFFI) or the location or compliance of any buildings situate thereon or otherwise. The purchaser(s) acknowledges that he/she/they have inspected the property and the property shall be conveyed to the purchaser(s) on a totally "as is, where is" basis. The purchaser(s) shall also assume any local improvement charges, telephone private line charges, tax levies, gas liens, and rural electrification liens, if any.
5. The purchaser(s) acknowledges that no chattels are being sold, transferred, or conveyed hereunder. The vendor does not transfer any interest in title to any chattels and does not warrant title to same. Further, the purchaser(s) acknowledges that the vendor is not responsible for the removal from the property of any chattels thereon.
Some upsides of foreclosures include a price below market value, no fear of upsetting the vendor with a low-ball offer, and a quick possession as in many cases foreclosures are vacant. Possible downsides include the following: Many foreclosures require no-condition offers, so you cannot write subject to financing. The property is sold in ďas is where isĒ condition. There are no warranties or representations made by the vendor and in many cases you do not get a survey (Real Property Report) with the property. Many foreclosures generate multiple offers and in some cases end up selling higher than fair market value. There are other safer deals on the market and sometimes they come in the form of estate, or distress sales. Feel free to contact me for further information.
Recruiting the services of a good buyer's agent is one of the most important decisions you will ever make concerning your real estate investment. There are a number of advantages to aligning yourself with my team. My services are free. The fee I receive when I help you find the right property is paid for by the seller. And I'm not out to sell you a house. My job is educate you on real estate value, act as your negotiator, and make sure you find a great deal and do not overpay. Some other benefits include up to 30 per cent off furniture and appliances at the Brick, and access to my finely tuned list of renovators, accountants, lawyers, and home inspectors offering excellent services at competitive prices. Feel free to contact me to learn more about my Search Plan and Buying Program.
BUYING A HOME
Whether you are looking for your first home, or you are a sophisticated investor, I have an ongoing search of distressed properties. Once I determine your search criteria, I enter it into my special software and my computer goes to work, automatically tracking the market and keeping you up to date on hot new listings the minute they come on the market. I even preview properties for you, weeding out the bad ones. As a buyer's agent, I negotiate strictly on your behalf and do not have a relationship with the seller. I protect your interests every step of the way, insuring you get the best deal possible. If you would like me to go to work tracking the market for you simply click on the Buyer Request Form, fill in your information, and Iíll begin sending you listings immediately. This is a free service and obligates you to nothing. I have access to any available property regardless of the listing company.
TEN OF THE MOST COMMON BUYING MISTAKES
NOT GETTING PRE-APPROVED. The seller will be a lot more comfortable accepting your offer if they know you are pre-approved. In some cases, they even demand a letter of pre-approval. It will also help you at the deal table when it comes to price. NOT USING A QUALIFIED PROFESSIONAL. I have talked to many buyers who decided to go the for-sale-by-owner route and ending up paying too much or getting involved in a messy contract that resulted in litigation. FAILING TO HAVE A PLAN. It isn't that likely to find a home that offers everything you desire. But, without a list it will be difficult to spot a home that meets most of your expectations. THINKING ďI CAN'T AFFORD A HOME.Ē Lots of people say they can't afford a home. But, with mortgage interest rates at historic lows, the timing has never been better to look at buying. CHOOSING A MORTGAGE BASED ONLY ON INTEREST RATE. It's a myth that a fixed rate mortgage at today's interest rate is the best option available. Depending on your risk tolerance, you may be better off with a variable rate mortgage. TIMING THE MARKET. This is not always wise. Although prices can and do drop, mortgage interest rates also go up and your personal financial situation may change as well. NOT BUYING. If you can afford a home and decide not to buy you will lose out on equity appreciation, principal reduction on your mortgage and the many tax advantages of owning. LOW BALLING. Sometimes uneducated buyers offer too little and end up alienating the seller and paying more for the home than if they offered something more reasonable. Leave it to your realtor to determine seller motivation and advise you during the offer stage. BAD FLOORPLAN. Don't overlook a bad floorplan as this could severely affect resale. CHOOSING A BAD LOCATION. Location matters. Check proximity to amenities, resale in neighborhood, busy streets, etc. If you have any real estate related questions, or you require assistance with your home search, feel free to call Brian Braaksma, Sutton Canwest Vista, 403-278-9208,
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