A foreclosure is a judicial sale process where a lender applies for a judicial or court-ordered sale which will be carried out under the supervision of the court because they have not received mortgage payments due.
The court (or Judge) has a duty to get the highest possible price for the property. That means highest price - not the amount left owing on the mortgage to satisfy the lender. The highest price is usually very close to market value.
Bargain hunters beware - Foreclosures most often sell for fair market value. Foreclosures are listed on MLS and given full exposure to the market by a Realtor. These gems can look enticing due to list price. The list price is as low as possible to attract the largest number of interested parties. After all, now that the bank owns the property, they don't want to continue to incur costs such as insurance, strata fees, taxes, etc. The property can be in a run-down state, with or without appliances and the bank will make no promise to convey the property in the state you viewed it. It's Buyer Beware. If you're up for the risk, there might be an upside. It's important to have a budget that allows for purchasing new appliances (because they might be gone) and some repairs you might not have initially discovered may come to light.
Due to the significant increases to our real estate market in the Greater Vancouver area, there have been very few foreclosures (less than 3% of all listings). In North America, the average foreclosure market is somewhere between 5% - 7.5% excluding the sub-prime era. If a homeowner was facing financial hardship, they could sell their property before the lender received the final order to sell called "Order Absolute". There was usually enough equity to satisfy the lender.
We haven't seen a significant gain in the market since 2008 in the Metro Vancouver Area. If an owner purchased at the height of the market (May 2008) with 5% down, their home may actually be worth less than they owe on their mortgage.
If you'd like to know the steps you need to take to buy a foreclosure property in BC, please email me firstname.lastname@example.org