Home Repossession By Banks and Bank-Owned Foreclosure Properties in Ontario, Canada
Foreclosures may occur when a person violates the terms of a mortgaged property with a bank or lending institution.The most common reason is the lack of ability to carry on making regular payments for the outstanding mortgage.
The mortgagor or bank can then redeem the mortgaged property.
When it's foreclosed, the property is then auctioned off, but if there aren't any bidders, it'll be regarded as a bank-owned foreclosure property.
The bank will then be the legal property owner and, since banks are not into the real estate business, it'll be considered a non-performing asset from the perspective of the bank.
The bank - being in the business of lending money and not in managing real estate - will want to get back the capital they've lent by selling this specific property at the earliest possible time.
This will create great opportunities for prospective investors in acquiring properties at a discounted price, as they may be sold for a fraction of its original price.
Demand for housing in Ontario grows relative to population growth, thus, real estate can be a tangible and reliable form of investment.
Banks sell their foreclosure properties, mainly because they are into money business, and thus, non-performing assets such as foreclosed homes give them no return on their money.
Receiving their capital back is their main goal, which is the reason why investors have a good bargaining advantage.
Good terms and conditions may be agreed upon between the bank and investor/buyer.
Furthermore, maintenance expenses and property taxes of the foreclosed property are additional burdens to the banks.
In addition, the risk of property damages incurred when the property is left vacant without persons to look after it, is also a reason why banks normally wish to sell quickly.
Advantages Of Buying Bank Foreclosures
- Low Prices: Banks obviously do not wish to lose money, but they prefer to sell fast, so investors can get advantaged prices which can be more to their favor. Some banks may think that the properties are in a state of disrepair, but the fact is that most properties are in extremely good condition.
- Clean Titles: Prospective real estate investors can have several advantages if they buy bank foreclosure properties. They usually have clean titles with no liens against the property except only with the bank itself, which makes paperwork easy to process. Usually banks have several foreclosed properties at their disposal and a good research at their database will give prospectors a wide variety of choice. And banks also treat most foreclosures as standard house loans making them more attractive to investors.
- Favorable Terms: With the main goal of acquiring back lent capital tied up in these non-performing assets, the bank may exercise their flexibility to terms and conditions, which can be more favorable to the prospective investors.
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| Price Reduced | Foreclosure | Bank Owned in Ontario |
