The Myths and Misconceptions About Power of Sale Properties

By
Real Estate Sales Representative with BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE

WHAT YOU SHOULD KNOW BEFORE BUYING

 

Over the course of my 30+ years as a real estate agent, I have been on the listing and selling side, representing buyers who wish to purchase a home listed under Power of Sale.  I sold a home a few years ago in STREETSVILLE under Power of Sale and I had many clients and perspective buyers calling.  They called because they thought they could "get a good deal" and potentially purchase the property at less than market value.

This is a misconception many people have, and this is NOT the case.  The Bank or Financial Institution selling the home must sell the property at fair market value or risk being sued by the previous owner.  The bank must, at a minimum, the outstanding amount owing on the property.  In addition to that, they must have sufficient funds to pay the real estate commission and any surplus is paid back to the owner.

THE BANK'S POSITION 

Once the Bank has taken possession of the property, after default by the owner, the Bank takes full control of the property and usually lists with a Realtor on MLS to get the property sold.  They typically require all offers to be faxed, and ask for 48-72 hours for irrevocable time, and only review/accept offers during business hours.

SOME PITFALLS

There also some pitfalls associated with buying a power of sale property.

  • there are no warranties associated with the property, or its condition
  • the property is usually sold in "as is" condition
  • there are no warranties associated with any appliances, if any are left behind
  • there are no warranties of ownership of any chattels on the property
  • there are no warranties of any contaminants or hazardous material that may be present
  • Typically, the lender does not allow for any inspection conditions in the offer… If you want an inspection you must conduct that prior to submitting an offer and depending on the findings, decide if you want to proceed.
  • The previous owner has up to the 11th hour, even if a firm offer has been accepted, to bring his mortgage payments current and re-claim his property.
  • The Bank usually includes many schedules and it would be prudent to have your lawyer review these prior to signing.

Therefore, getting a “good deal” isn’t always the case with Power of Sale properties, as there is some risk level associated with these properties, and you could end up having your contract negated if the owner brings his mortgage payments up to date before the property changes ownership.

You should ensure you get all the information associated with Power of Sales purchases from your real estate agent or lawyer relative to the laws in your area before signing on the dotted line!

 

Your Trusted Streetsville|Mississauga

Real Estate Professional

When you choose me to handle your real estate needs, you are choosing a real estate professional who:

  • cares about you and your family

  • will listen to your needs

  • work together with you, and

  • protect your interests to achieve your objectives

********************************************

I am the proud recipient of the Quality Service Certified Platinum award for outstanding service to my clients - a rating of 100%.  Read a few of my testimonials below.

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Dedicated to providing outstanding service one would expect and deserve from a real estate professional.

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Mississauga and Streetsville Real Estate


When you choose me to handle your real estate needs, you choose a real estate professional who cares about you and your family, who listens to your needs and who will put your interests first and foremost. I will work together with you, protecting your interests, to achieve your objectives.

I have been uniting families and homes for more than 31 years.. Let me put my 31+ years of knowledge and experience to work for you when selling or buying your next home.

 

Proud recipient of the Platinum award for outstanding serivce with a rating of 100% voted by my clients!!

A great experience starts with a great agent !

Helping You Make The Right Move since 1987. 

Call me at (905) 896-4622 or direct at (416) 717-6331

 www.mississaugarealestateonline.com    gvalvasori@gmail.com            

              

 

No part of this publication, may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, or electronic methods, without the prior written permission of the publisher.  Copyright © 2018  Gloria Valvasori, all rights reserved.

 

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Topic:
Home Buying
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Ontario Peel District Mississauga
Tags:
misissauga mls listings
mississauga real estate agent gloria valvasori
streeetsville neighbourhood sales
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Rainmaker
1,624,434
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Gloria,
Nice explanation of some misconceptions regarding Power of Sale properties.

Jan 22, 2018 12:04 PM #1
Rainmaker
577,189
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

HI Carol Williams , thank you for taking the time to stop by.... and for your comments... 

Jan 22, 2018 12:05 PM #2
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Rainmaker
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Gloria Valvasori, Accredited Senior Agent

REAL Experience | REAL Commitment | REAL Results!
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