October 9, 2013
A real estate in Vancouver can be in the early stages of foreclosure which means that the lender has not yet reached a point that it is in control of the process. The owner still is able to sell the property and then pay out the lender out of the sale proceeds. However, if a Realtor in West Vancouver acts for the seller he needs to find out how much the seller owes the bank. Your real estate agent wants to know for sure that the net proceeds from the sale will be enough to pay out the lender. If they are not, the bank might accept less but the time to negotiate that is before the deal is signed not later. I have seen several deals collapse at closing because there was not enough money after payment of commissions and closing costs to pay off the lender. The seller then becomes liable to the buyer for his damages.
And when the Realtor is acting for a seller, he needs to make sure to find out if he owes anyone else money. If that creditor subsequently registers a judgment on title after the purchase agreement has been signed then the seller will have to find a way to clear that judgment. If he is already in foreclosure with the secured lender, how likely is it he will come up with money to pay another creditor?
The secured lender is not going to be co-operative and take less money if a subsequent judgment creditor will also get some money to clear its judgment. The secured creditor just needs to proceed with the foreclosure and cut out the judgment creditor completely.