Posted by GL on June 07, 2000 at 13:25:44:
I can’t speak for BC because I live in Ontario. But so far as I know both use the same system.
Banks haven’t forclosed on anything in about 20 years. Now they use something called “Power of Sale”. This is a clause in the mortgage that gives them the right to sell the property if they are not paid their payments. In other words they can sell the property, without foreclosing,even though they do not own it.
When they do this they are allowed to keep the money they are owed plus expenses. Any surplus must be turned over to the owner, if there is any.
They must make every effort to get a fair price. If they do not, the owner can sue them. This prevents under the table deals, quicky sales etc.
So they all use basically the same procedure. First secure the property by a security company. And have it cleaned. Then, get appraisals from 2 separate licensed appraisers, at arm’s length from the bank. Now they can list it with a Real Estate broker who will attempt to sell it.They all have their favorite brokerage, one of the big national companies that is tied to the bank usually.
All negotiating goes through the listing broker. Then it goes to a clerk in the real estate department at head office. This clerk knows nothing about the property or the town it is in, and is working entirely from the appraisals and other documents. She will not accept less than the appraised price, well maybe 5% or 10% off. Also they will not consider anything but a clean all cash offer with no conditions. If you need financing arrange it yourself elsewhere. Certain guarantees that are standard in every real estate transaction they simply refuse to provide. No survey, no urea formeldahyde foam, no clear title, no nothing. They will give clear title, but I have had them put in the contract that they will furnish it at their convenience, not necessarily at closing, or within any other time limit.
If the property has been on the market 6 months or a year they will reappraise the situation and consider a lower offer. But only all cash with no conditions.
Hope this helps. You should talk to a real estate agent in your local area to get the real lowdown. Good luck.
