Always looking for new investment opportunities, I took a look at Canadian reposessed auctions to see how they differ from UK property auctions. People from the UK are looking for investment markets abroad, due to the highly inflated state of our property market, especially in the affluent south of England. There is lots of information on Eastern European markets, but I want to find out whether there is opportunity from one of the old colonies and this post represents what I have found so far.
It’s a little tongue in check and don’t take my words for gospel truth or anything, remember in all things do your own research, maybe engage with someone from the area you’re thinking about investing in as they will be able to give you a better low down.
I am doing more research on the subject on behalf of someone, so this post won’t be in-depth just the basics of what I have learned so far.One thing that grabbed me from the start, the one thing that is certainly different in Canada than it is in the UK when it comes to auctions featuring reposessed property, is that the City council can sell your land or property at auction for not paying your property taxes!
What I have learned (so far) about Canadian repossessed auctions.
- They are covered by the Municipal Sales Act 2001
- Under this act the property can be removed up to the time of tendering start if the tax is paid
- The minimum bid is the price of the arrears owed
- The city that’s forcing the sale is under no obligation to have the property vacated, provide info on the value of the property under auction or staggeringly to get the market value for the property
In a Canadian reposessed auction, the City can sell your property for little and nothing, because you’re in arrears with your property taxes. That’s the UK equivalent of not paying your Council tax!!! Over here they just send you to jail for a couple of months. (The UK favours land and property owners, always has. The land owners were the ones who wrote most of our laws you know, once the monarchy was stripped of its law making powers back in the day). I’ve never heard of anyone actually losing their property to Lambeth Council. Lambeth Building Society maybe but not the local council, that’s out-ray-geous.
Anyway back to what I’ve learned so far about Canadian reposessed auctions.
- The winner bidder pays the outstanding taxes due on the property and any other costs involved with the process.
- To be eligible to bid you pay a deposit of 20% of your tender amount
- If you win you have 14 days, once notified, to pay the balance of your tender amount and any other monies due otherwise you lose your deposit and it gets offered to the next highest bidder
- If you’ve tied with someone else (another party has tendered the same amount), the earlier bid wins it.
Tendering is a bit of a lottery way of buying a property. Unlike UK property auctions, you don’t get to see who else is bidding against you. The process seems quite dry, you know what I mean.
When you visit a UK property auction, you kinda get a buzz from the bidding process. It’s one of those adrenalin things. Unless the auctioneer is taking ‘bids off the wall’, you stand a good chance of paying the lowest possible price for a property. The property up for auction may not reach it’s true market value, but it will reach it’s true worth albeit in relation to the people in the room or bidding on the phone.
With the tender method used at Canadian reposessed auctions, unless you know the local property market really well, you stand a chance of paying over and above the odds. However, like I said before, like all investments, you should investigate them before trying to get in on what at first glance might seem to be a potentially lucrative market for the UK investor given the strength of the pound right now.