How to figure out when a Power-Of-Sale
Property has become a “deal”?

Bank Sale GTA Listings

To Buyers who are looking for FREE Foreclosure Listings

Let’s first start with, in simple terms What Is Power-Of-Sale?
It’s the mortgage lender right to sell the property when a default occurs.

So now let’s examine a scenario regarding the listing price of these properties.

Let’s say there are two identical properties next to each other.
One is being sold by seller as an owner and the other by a bank under power-of-sale.
The owner calls real estate agents and seeks the Comparative Market Analysis [CMA] of the property.
The bank calls real estate agents and appraisers to seek the value of the property.
Let’s say in both the scenario’s the market value comes to around $500,000.

The owner may prefer to list the property at $550,000 to test the market.
The bank will prefer to list the property at $500,000 i.e. close to the market value.
Now a prospective buyer after seeing both may find the Power-Of-Sale Listing to be a deal.
In fact, it is not, it’s at market value, not knowing the other is listed higher.
So when a power-of-sale listing initially comes, it’s at Market Value.
If it is listed way lower than area comparables, there may be other issues.
Other issues can be stigma, property needing renovation, grow house, fire etc.

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Just to clarify again, when a Distress Sale initially comes in the market it may not be a “deal”.
Now let’s say the property doesn’t sell in 30, 60, 90 or more days.
The bank will constantly review the property and area prices.
During these reviews the bank may reduce the price of the property.
At a certain stage during these review periods the power-of-sale may become a “deal”.

Let’s review some more insights with procuring a bank foreclosure property.
There are more nuances to finding a deal when buying a property than the above scenario.
Sometimes a regular listing is a better purchase than a power-of-sale listing.
Carefully review “As-Is”, “Where-As” info and schedules along with others so called standard clauses.
Chattels specially appliances may / may not come with the property.
There may be outstanding work orders with the city.
In essence, be completely thorough, be extra diligent and avoid these Buyer Mistakes.
Have a very smart team of Real Estate Agent, Home Inspector and Lawyer along your side.

To conclude, follow with your agent as every agent has access to these power of sale listings.
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Get the facts, understand warranties, disclosures from an expert before you indulge in Power-Of-Sale Homes.
You don’t have to search the entire web for Distress Sale Listings in Toronto GTA. Call / Email Me.
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Manoj Atri, REALTOR® Re/Max Hallmark Realty Ltd., Brokerage
Office: (416) 494-7653 | Cell: (416) 275-2089 | Email: [email protected]
Website: http://www.manojatri.com/Silver_Listings