When it comes to investing in real estate, buying a financial recovery in Montreal can be a very attractive option. You may have seen those reality TV shows where investors buy houses at a discount, invest a little money in them, then resell them at a large profit. But is it really realistic? There are 5 things you should know before buying a finance trade-in in Montreal.
Fewer and fewer opportunities
The first thing to know about buying a financial recovery in Montreal is that there are fewer and fewer foreclosed properties for sale. In fact, there are fewer finance repossessions than there used to be, and those that are put up for sale are very often bought up quickly by cash homebuyers. We can help you find the finance trade-ins available in Montreal. Call 514-320-1000 now.
Buying at auction
Unless you’re an experienced real estate investor and have a huge sum of money ready to invest, buying a finance repossession at auction isn’t a very good idea. When you buy a finance repossession at auction, you can’t visit or have the property inspected. As a result, when you manage to buy the property, you have no idea of the condition it’s actually in. This can lead to substantial financial losses.
Buying at the bank
You could make a good deal by buying a finance trade-in from the bank. However, if the market is competitive, you may have to offer a substantial sum to obtain it. If you really want to buy a property, your first offer should match the bank’s asking price, or come close. If there are many offers on the property, it may be necessary to offer an even higher amount and limit your conditions to a minimum in order to be the buyer. Chances are there will be other buyers interested in the property you have in mind, especially if it’s in a good location, close to stores, downtown or a park, for example.
Inspection
Most finance takeovers are sold by a bank. This means that there is no seller to take care of the renovations before handing over the property. The bank will certainly not repair a property before selling it. All she wants is to get back the money she invested in this property. Under these conditions, it is extremely important that your contract allows for property inspection, and that this is carried out promptly. That way, you’ll know where you stand, and you’ll have legal recourse in the event of a problem.
Hidden costs
Buying a finance lease in Montreal is more than just paying the price and closing costs. If the previous owner of the property didn’t pay his mortgage, it stands to reason that he wouldn’t have paid his taxes and/or condo fees either. As the owner, you’ll be responsible for catching up on these payments, in addition to reimbursing Hydro-Québec and other service providers for missed payments. Be sure to talk to your notary about this before finalizing the purchase.
In addition to what’s owed on the finance repossession, you’ll also have to pay to clean, renovate and modernize the property. There are no cleanliness requirements for a foreclosed home, and the former owner, angry with the bank, may have caused quite a mess by letting off steam. As well, renovations to the property may increase its value, which in turn will increase the cost of property taxes.
