Location: God's own country
Posted on: 09-05-09 14:06:09
http://www.yourhome.ca/homes/article/631682 (Toronto star article)
Hello cd's,
Being unemployed and in the real estate / construction line, I plan to buy, renovate and sell power of sale houses.
These houses are foreclosed houses and which the bank is selling for a discount.
I would appriciate as to how we can locate these houses and then buy to sell them for a profit later. Is it listed under the MLS website. Do we have to go through a real estate broker to buy these houses?
I am looking for houses around the Dixie - Eglinton area of Mississauga as I plan to relocate there soon.
All help appriciated.
Peace by TK
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I am a Gents and not a Ladies.
It has thin market. But so is the case with doctors. I don't think seller would mind you not using any agent. He might like if you go without any middle layer.
But agents have more information and knowledge about the market. So, obviously they can help you locate the property that fits your needs. In past 1-2 yrs I have heard of only 3 such foreclosed properties. 2 were pointed out by RE agent.
Try mls with ultra low range, something like detached in Mississauga between 200K and 250K. If you get anything, most likely that's what you are looking for. I still consider approaching RE agent to be a better bet.
Some 4 weeks back I saw one detached somewhere near hartland mall, mississauga. 3 bed for under 300K. But the pictures showed that it was in middle of some big reno. Can't find it now. Also check this MLS®: W1554423, (http://www.thetorontorealestate.com/)
It's high time now. No other intentions. But please avoid using terms like "Being unemployed" or "Wrongfully fired". These adjectives send out wrong message and, when on negotiation table (job, business, anything), you don't want to the other person to feel more powerful.
Hi tamilkuravan & sville...
I think its good thread talking about POS. A lot of people may interested to learn or buy POS RE and I hope some expert/realtor can share their knowledge.
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Big spike in number of homes lost in GTA
Banks seize properties as mortgage defaults grow
http://www.yourhome.ca/homes/article/631682?ref=patrick.net
The close to 5,000-square-foot mansion was a just reward after 20 years running a heating-and-contracting business in Toronto. In addition to the $550,000 purchase price, he added an estimated $700,000 in renovations, including gutting and rewiring the home and luxuries such as a stocked fish pond and rockery.
But as the economy and real estate market started to head south, so did Sebestyen's business. He was forced to declare bankruptcy last October.
His dream home is now listed for $750,000 under power of sale by the Royal Bank of Canada.
"It was extremely difficult. I will never have a home like that again. After 20 years, it was over," says Sebestyen, who now lives in a rental apartment with his wife in Mississauga.
Power-of-sale statistics are not officially tracked by any agency. But according to figures compiled for the Star by real estate broker Mike Donia and by Jim Common, a realtor who has a monthly power-of-sale newsletter, there were 472 such listings in the Toronto area on the Multiple Listing Service in March, up 44 per cent from March of last year, the first year-over-year increase Common has seen in recent memory.
"I have not seen the level of desperation I am seeing out there ... now," says Common.
In the ruthless world of real estate cycles, one person's misfortune is another person's opportunity. As the economy sours, power-of-sale properties – typically homes that have been repossessed by a lender because the owner defaulted on their mortgage – are making a comeback.
"There are no barriers to this downturn. Everyone can get hit, rich man, poor man. You can't buy immunity from the financial crisis," says Donia, who does a thriving power-of-sale business. "There are a lot of people out there who bought with zero down during the good times and are now walking away."
The number of distress sales, while growing, still represents only a tiny fraction of the thousands of listings on the Multiple Listing Service. But they do act as an early warning stress test of potential problem spots in the Greater Toronto Area.
According to the research for the Star, the vast bulk of sales are in the Brampton and Bramalea area, followed by Oshawa, both areas that have been severely hit by manufacturing and auto plant layoffs.
More recently, Chrysler has filed for bankruptcy protection in the United States, while General Motors of Canada announced last month it would downsize even further – which could kill 38,000 jobs in Canada, with most of them in Ontario.
"Once you lose your job it's hard to hold onto that home – so these areas get hit first," says Donia.
The concern is shared in a recent report by the Canadian Association of Accredited Mortgage Professionals, which warned mortgage defaults could be on the rise because of the high number of job losses in the economy.
"The greatest risk facing the Canadian mortgage market is job loss," said CAAMP chief economist Will Dunning.
So far the existing home market has held up relatively well, with sales off by only 7 per cent in April compared to a year earlier, in a better-than-expected spring market. But economists are worried about the long-term implications of job loss. The equation is simple. No matter how low interest rates go, without a job, no home is affordable.
Canadian employment rose by 35,900 jobs, said new figures released yesterday, the first positive figure since last October. But the unemployment rate remained unchanged at 8 per cent, up from 6.1 per cent a year ago, as the number of Canadians receiving employment insurance reached its highest level in nearly five years.
According to the Canadian Bankers Association, mortgages in arrears (in default for three or more months) were up to 14,676 in February of this year from 10,376 a year earlier. The number is still small, representing just 0.38 per cent of all outstanding mortgages in Canada, but it is up from 0.27 per cent in 2008, a number that had remained relatively flat until it started creeping up in November of last year.
Sebestyen has become one of those numbers. He tried to sell his home last year for $829,000 before his bankruptcy, but the bank now has it listed for $750,000.
"I put my life into that house. I renovated it from top to bottom," says Sebestyen. At 57, he finds himself working odd jobs to make a living, not the hundred-thousand-dollar contracts his company used to do, and he has to make do without the tools he lost to bankruptcy. He also has health problems as a result of diabetes.
"I don't know about retirement. I will be working my entire life. I fix a toilet here or there, but at least I can get by."
Sebestyen at least has a roof over his head. Donia says he has another client, a machine operator who lost his $47 an hour job and $600,000 Richmond Hill home. He now lives in a park.
"He just pitches his tent and showers at the YMCA," says Donia. "He says at least he doesn't have to worry about the property tax."
While there are more Canadians losing their homes, Donia stresses that the numbers are not comparable to the United States, where distress sales on properties have ballooned to historic proportions.
House prices have cratered by 50 per cent and more in some states as buyers walk away from homes that are worth less than the mortgages they owe. In some areas such as Santa Ana, Calif., more than half of the existing home sales in the first quarter were distress properties.
This has led to the phenomenon of foreclosure tours, where potential buyers hop on a bus to see if they can spot a bargain.
That's not quite the case in Canada, where volumes have been lower, although the numbers have been picking up.
You should contact a real estate agent, They have access to power of sale listings. If you want to seriously pursue it then you should first take a course on residential construction. Check this course out. Maybe EI will pay for you to take it.
http://www.thecentre.on.ca/SkilledTrades/Construction.asp
All the best.
Quote:
Originally posted by rahul_singh23
Hi tamilkuravan & sville...
I think its good thread talking about POS. A lot of people may interested to learn or buy POS RE and I hope some expert/realtor can share their knowledge.
And how is your complete reply related to the original question?
Location: Brampton, Ont, Canada
Posted on: 11-05-09 21:24:46
I agree RE agent should be first approach , but the question is do they really have good listing ?
most of the good deal done before its hit the MLS- as per one of my RE friend told me
THERE IS BANK PROPERTY AS WELL AS CITY Tax Sale Properties - BUT WHERE R THEY ? WHO HAS CONNECTIONS
mostly when u approached RE agent , first thing they wants to know is our budget ... and then look for mls listing to fits ....
i am not sure about commission on bank and city tax property - i am assuming may be RE agent get less or none commission on those property , plus lot more work then regular mls listing -
SO IN MY BELIEVE RE AGENT IS NOT USEFUL TO BUY THOSE PROPERTIES , WE SHOULD LOOKS AROUND AND FIND SOME LINKS OR CONTACTS.... SEARCH SEARCH AND SEARCH. DONT DEPENDS ON RE FOR THOSE KIND PROPERTY.
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'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)
Quote:
Originally posted by tamilkuravan
http://www.yourhome.ca/homes/article/631682 (Toronto star article)
Hello cd's,
Being unemployed and in the real estate / construction line, I plan to buy, renovate and sell power of sale houses.
These houses are foreclosed houses and which the bank is selling for a discount.
I would appriciate as to how we can locate these houses and then buy to sell them for a profit later. Is it listed under the MLS website. Do we have to go through a real estate broker to buy these houses?
I am looking for houses around the Dixie - Eglinton area of Mississauga as I plan to relocate there soon.
All help appriciated.
Peace by TK
Hi TK,
First of all, there is a difference between 'Foreclosure' and 'Power of Sale'. In Ontario, Canada, Power of Sale is used as the primary recovery method of the debt by the lenders. In layman's language, Foreclosure is just like 'Kudki' or 'Kabja' by the bank like sometimes we see that in India too and Power of Sale is the Power given to the bank by the owner of the property to sell on his behalf and recover the debt but bank can not sell the property below the True market value. Once the bank sells it, after recovering the debt, if there is any surplus, it is passed over to the owner and if there is any shortfall, bank may come after the owner. Similarly, if the bank sells the property at some ridiculously low low price, the owner has all the legal rights to come after the bank and sue it, asking 'how come they sold it at such a low price?'
Under power of sale, the property can be sold by auction, private contract, or tender. Usually the property is listed with a real estate agent and placed on the market for sale. To ensure that the property comes to the attention of a large segment of the market, guidelines have been set up, including; listing the property with a multiple listing service, obtaining appraisals, and ensuring the listing is for the usual period of such properties.
Once the property is sold and if there is any surplus, the lender must account to the borrower(s), and other subsequent encumbrancers. The Mortgage Act requires that the proceeds of the sale first be applied to the cost of conducting the sale, then to interest and cost owing under the mortgage, then to principal money owing under the mortgage, next to pay any amounts due to subsequent encumbrancers, and finally to pay tenants' security deposits.
Foreclosure is a legal action that a moneylender can take if a person who borrowed money using a mortgage stops paying back the mortgage. Foreclosure allows the lender to take or sell the person's house by first getting a court's permission to do so.
The POS transactions work the same way as a normal sale/purchase. You can still put the Mortgage and Home inspection condition in the offer but POS properties are sold on 'As is' basis. There are no warranties or representations made. You, as a buyer, have to do your own diligence.
You do not have to work with a Realtor(R) in order to find POS property. You can do it on your own. Start searching for a POS property, look into the news papers, govt. publications, drive around, call all the listing agents and ask them if the property is on POS because you may not find many properties advertised as POS because of many lenders' strict policies and guidelines too OR work with a Realtor(R) and let him do all the legwork and help you find a POS because the MLS system which Realtors have access to has more information to offer than the public MLS. There are certain ways to find POS properties which you may not know.
I have been dealing with POS properties for last few months now. I am a part of a team which specializes in POS and believe you me, POS are selling like hot cakes. we are selling most of the listings within 6-7 days of the listings and in last 2 months we have had multiple offers on 80% of our listings. Most of the listings are going either for the full price or close to full price, some of them even higher than the asking price. One property I am working on currently which is in Brampton, 4 Bedrooms, 3 washrooms, Detached, 2 car garage, corner lot, listed for little over $300000, put in the market on Thursday evening and so far till today, we have 4 offers on that.
I would say, it is the time to grab this kind of opportunity but whatever you do, make sure you do your homework properly. Do not just jump into it and then repent.
PS: To Blue_Peafowl and all CD biratheren, the above is not with purpose of advertising but with the sole objective of helping CD family.
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Sanjeev Manocha, MBA
Real Estate Sales Representative
Accredited Buyer Representative (ABR)
Re/Max West Realty Inc, Brokerage
96, Rexdale Blvd., Toronto
Mobile: 416-843-7600
Office: 416-745-2300
http://www.manocharealty.com" rel="nofollow">LINK
