Distressed Property in Calgary – Who Should Buy Residential Property with Issues?
Distressed property in Calgary comes in many varieties & Buyers need to be informed REALTORS® need to give Buyers “Full Disclosure” so they know what the risks are before they make the purchase. Buyers REALTORS® can only disclose what they know, so the Seller and Listing REALTOR® need to provide as much information as possible. Certain sales are further restricted by sellers that modify the Alberta Residential Purchase Contract that add more risk to the Buyer. Buyers need to be very knowledgeable when they are considering the purchase of a Distressed Home since the risks go up and the price does not always come down to reflect the risk increase. In our experience, the average family Buyer should avoid Distressed Property due to the risks outweighing the gains. Distressed property is best left to the informed Investor who knows the process of buying and selling this type of property.
Distressed Residential Property in Calgary can be categorized as follows (but not limited to):
1) Un-remediated “Grow Operation” Sale: Very High Risk to health & your wallet. Don’t think about this type of sale unless you are very knowledgeable.
2) Remediated “Grow Operation” Sale: High Risk, property may not keep its value when you come to sell.
How do you know it’s fully remediated?
3) Foreclosure Property Sale: High Risk, will have restricted purchase contract & other conditions.
4) Court of Queen’s Bench Sale: High Risk, no conditions, restricted purchase contract, not for the average Buyer.
5) Knock Down Property sale or “Very Old Property”: Moderate risk, buyer needs to understand this type of property & costs to knock down, plus environmental costs, re-zoning, etc.
6) Property going into Foreclosure: Moderate Risk. Could have restricted purchase contract & other conditions. Seller may not be able to close and your deposit could be locked in for a long time, possession may not happen.
7) Murder, suicide, major crime, major fire, etc. Moderate to high risk.
Buyer need to have full knowledge of the “incident” that happened so they can make an informed decision.
Could affect the re-sale value.
8) Distressed Location Sale & other types of distressed sales. Moderate to high risk.
Perhaps the property is next to Night Club or busy Pub, or next to commercial property, or on a very busy intersection. There can be many location issues that make the present property value and resale value unpredictable.