If you decide you want to buy a foreclosure property there are a number of things to consider. Many people think they want to buy a foreclosure but once they learn all the risks involved decide this kind of purchase is not for them. When an offer is written on a foreclosure, the buyer must sign what is typically referred to as a Schedule A. These documents vary in content but essentially detail the buyer is accepting the property in "as is where is" condition and waiving any rights to litigation if they find on possession that the prperty is not how it was when originally viewed. It also outlines that the seller does not offer any warranties or representations with regard to the condtion of the property or its mechanical systems. Foreclosures can be extremely complex and it is best to consult the services of an expert, and perhaps even obtain legal advice, before pursuing such a property.
Below is an example of a Schedule A form that must accompany any foreclosure offer. As I said, these forms differ in content depending on the lawyers involved but this example will give you a general idea of what to expect.
SCHEDULE A. The following terms and conditions shall apply to and shall form part of any agreement of purchase and sale to which this schedule is attached.
1. Where there is any conflict or discrepancy between the terms and conditions in this Schedule and the terms and conditions in the agreement of purchase and sale attached, the terms and conditions in this Schedule shall supercede and apply in place of such other conflicting terms and conditions.
2. Other than being required to provide a registerable transfer of land/title, the vendor shall not call for the production of, any other documents of any kind (except such as are in the vendor's physical possession), and without in any way restricting the generality of this, the vendor shall not be obliged to provide a survey, Real Property Report, Compliance Certificate, or condominium documentation.
3. The purchaser(s) shall not receive, from or on behalf of the vendor, a certificate of exempt supply of Real Property, or any similar assurances with respect to the Goods and Services Tax relating to the property. Any GST shall be paid by the purchaser(s).
4. The purchaser(s) acknowledges that no representations or warranties whatsoever have been made or are made or given by the vendor or anyone on its behalf to the purchaser(s), including, without limiting the generality of the foregoing, representations or warranties as to the condition of the property being conveyed to the purchaser(s),the absence of urea formaldehyde foam insulation (UFFI) or the location or compliance of any buildings situate thereon or otherwise. The purchaser(s) acknowledges that he/she/they have inspected the property and the property shall be conveyed to the purchaser(s) on a totally "as is, where is" basis. The purchaser(s) shall also assume any local improvement charges, telephone private line charges, tax levies, gas liens, and rural electrification liens, if any.
5. The purchaser(s) acknowledges that no chattels are being sold, transferred, or conveyed hereunder. The vendor does not transfer any interest in title to any chattels and does not warrant title to same. Further, the purchaser(s) acknowledges that the vendor is not responsible for the removal from the property of any chattels thereon.
As you can see the process can become quite complicated and risky. Feel free to contact me if you have any questions. Thank you.