Foreclosures: King’s Court vs. Bank Sales – What You Need to Know Before You Buy

by Cole Porter

Buying a foreclosure can be an excellent way to get a great deal on a property, but not all foreclosures are sold the same way. In Alberta, you’ll commonly see two types of foreclosure sales: those handled through King’s Court and those sold directly by a bank. Each process comes with unique rules, timelines, and risks that buyers should be aware of before making an offer.

King’s Court Foreclosures

When a property goes through King’s Court (formerly Queen’s Court before the recent change in the monarchy), it means that the foreclosure process is being overseen by the judicial system. This type of sale follows strict guidelines and timelines that differ significantly from a bank-owned foreclosure.

Key Differences of Buying a Foreclosure Through King’s Court:

1. You Must Wait for a Court Date
Unlike a traditional home purchase, where an accepted offer moves relatively quickly toward closing, a King’s Court foreclosure requires you to wait for a scheduled court date. This means you could be waiting weeks, or even months, before knowing if your offer has been approved. If multiple buyers submit offers, the judge will consider all offers on the court date and typically select the highest and most favorable one.

2. No Conditions Allowed
One of the biggest differences with a King’s Court foreclosure is that all offers must be unconditional. This means you cannot include financing, home inspection, or sale-of-home conditions. As a buyer, this can be a significant risk. Without an inspection condition, you must be prepared to purchase the property “as-is,” meaning you could be responsible for any costly repairs or issues that arise after possession.

3. The Court Decides Your Possession Date
Unlike a standard purchase, where buyers and sellers negotiate a closing date, with King’s Court foreclosures, the possession date is set by the court. You’ll have no control over when you get access to the property, which can make planning a move or lining up financing more challenging.

4. The Deposit is Non-Refundable
Because no conditions are allowed, if you submit an offer and later realize that you can’t secure financing or uncover an issue with the property, you risk losing your deposit. This makes it even more important to be 100% certain before making an offer.

Bank-Owned Foreclosures

When a bank has already taken ownership of a foreclosed property, it typically sells it in a more conventional way, similar to a standard real estate transaction. However, there are still some key differences to keep in mind.

Key Differences of Buying a Foreclosure Through a Bank:

1. Offers Can Include Conditions
Unlike a King’s Court foreclosure, a bank-owned foreclosure allows you to include conditions such as financing and home inspection. This gives you some protection and peace of mind before finalizing the purchase.

2. Possession Date is Negotiable
When purchasing a bank-owned property, you can negotiate the possession date, which makes it easier to plan your move and coordinate financing.

3. More Predictable Timeline
Since the sale is not subject to court approval, the process tends to move much faster than a King’s Court foreclosure. Once the bank accepts your offer and all conditions are met, the deal proceeds toward closing like any other real estate transaction.

4. Property is Still Sold ‘As-Is’
While you may have the opportunity to conduct an inspection, banks typically sell foreclosures “as-is,” meaning they won’t make any repairs or offer warranties. If an issue arises after you take possession, you’ll be responsible for fixing it.

Which Option is Better for You?

If you’re considering buying a foreclosure, understanding the differences between King’s Court and bank-owned properties is crucial. A King’s Court foreclosure might offer a better price, but it comes with higher risks and a longer, less predictable process. A bank-owned foreclosure, on the other hand, gives you more flexibility and security but may not be as deeply discounted.