13. This page explains how You can be protected and gives my recommendations when buying a POS property

| POS Overview | Bank Options | Legal Aspects| Standard Charge Terms | POS Considerations | Quit Claim | Foreclosure | Power of Sale | Issues | Sale Price | POS Process | POS appropriate? | Clauses in Offer | How will Lindsay Protect you? | Conclusion

This page gives recommendations when you submit your offer on a Power of Sale Property.

• I would advise you to perform your due diligence, consult a lawyer and be very careful when purchasing a power of sale property
• It's important for you to read over and understand all the clauses that the bank uses in it's schedule on the agreement and even after I explain these clauses to you, it's mandatory for you to have the agreement reviewed by your lawyer before you submit your offer.  There are many items that you must be aware of when you purchase a power of sale property and only a lawyer can properly explain them all to you
• A well drafted agreement can remove the usual protection offered to a purchaser and in the final analysis you will receive what you bargained for when you purchase a power of sale.   The bottom line is that you, the buyer of a power of sale, will get a bad deal if your eyes are not open and you don't know what you are getting into or it can be a good deal if you perform all your due diligence and understand the risks and rewards of purchasing a power of sale property.
• Generally speaking, the risk when buying a power sale is not a value risk, but the risk is that you are putting yourself in an inferior position, thus the price or value you obtain the property at should compensate you for this risk, or why go through the hassle and uncertainty involved with the transaction.  In most POS situations, you are buying an inferior product, so you should obtain it at a lower (lesser) price.
• Your lawyer will likely charge you more to review and advise on a POS offer compared to other offers, due to the complexities and time involved, but you should verify this fact with your lawyer
• The law cannot protect buyers from their own greed and this is why our economy in Ontario is a Lazzai Fair economy or a free economy where market conditions prevail and you are allowed to do what you want to your detriment or your gain.  This is also why you must be careful even if you are attracted by the price of a Power of Sale Property
• You may wish to read my analysis of purchasing a power of sale property at this page.
• There is no right or wrong answer when buying a power of sale property, you must do your due diligence, research the marketplace and you decide if the risks of purchasing a power of sale property outweigh the reward of buying the property at a good price
• One saying about Power of Sale Properties is "you get a lower price but it's a lessor product"

The next page discusses my conclusions and recommendations when you buy a Power of Sale Property

This series of articles about Power of Sale Properties, Foreclosures and advice when you purchase a power of sale property is brought to you by Lindsay Schenk  Please understand that these are my personal thoughts and experiences, do not use my information herein as legal advice and always professional seek legal advice on any issue pertaining to real estate and especially Power of Sale.

| POS Overview | Bank Options | Legal Aspects| Standard Charge Terms | POS Considerations | Quit Claim | Foreclosure | Power of Sale | Issues | Sale Price | POS Process | POS appropriate? | Clauses in Offer | How will Lindsay Protect you? | Conclusion

If you have any questions or require further information about Power of Sale properties or anything to do with real estate, please send me an email

I can assist you with all of the complexities when you purchase or sell your next home.  Please don't hesitate to email me

Thank you,
Lindsay

You may read more about Power of Sale, Bank Sales and Foreclosure Properties

or go back to list of Real Estate Helpful Articles

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What is a Foreclosure Property?  What is a Power of Sale Property?

Why is this service useful to you?  If you receive these notices first, before anyone else, you will be the first to see the property before most other buyers and then you can potentially purchase the property before others have even seen it!  We are then able to help you negotiate the lowest possible price when you purchase your property through us!

Sign up to receive Foreclosures, Power of Sales and Bank Sales for MLS listings and properties in Mississauga and Oakville Would you like to receive the new residential Power of Sales or Bank sales or Foreclosures in the Mississauga, Toronto, Oakville and GTA areas?  This would include new power of sale and bank sale listings as they are added to the MLS database system.  You may fill in the fields below and click "Sign Me Up!"   What is a power of sale property? POS disclaimer Your Email: Your Name:       By submitting this form you are agreeing to these terms.  Everyone who fills out this form is now automatically signed up to receive my real estate newsletter.  You can always unsubscribe after you receive your first issue.  It could be worse!   You may read the latest issue of my On-Line Real Estate Newsletter before you decide. Yes, I agree to the above   I would have signed up anyway Yes, I agree, but I would prefer not to sign up Agents and Realtors beware You will receive a very fast answer from Mark.  Thank you and have a great day! Definition of Foreclosure or Bank Foreclosures:  A situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage, so the lender, be it a bank or building society, can seize and sell the property as stipulated in the terms of the mortgage contract. Power of Sale and Tax Sale properties - questions and answers What is a Power of Sale Property? When a borrower defaults on a home mortgage, the lender may attempt to recover its losses by selling the property under power of sale. Definition of Power of Sale:  A clause commonly inserted in a mortgage and deed of trust that grants the creditor or trustee the right and authority, upon default in the payment of the debt, to advertise and sell the property using standard methods such as the MLS or at public auction, without resorting to a court for authorization to do so and without actually taking possession of the property. Once the creditor is paid out of the net proceeds, the property is transferred by deed to the purchaser, and the surplus, if any, is returned to the previous owner (the debtor).  The debtor is thereby completely divested of any interest in the property and has no subsequent Right of Redemption—recovery of property by paying the mortgage debt in full once title has transferred to the new buyer. You will often see advertisements about Court Auctions, Pre-Foreclosures, Homeowners in Bankruptcy, HUD Homes, VA Homes, Government homes and similar sounding wording.  In my experience, many of these types of investment property opportunities come out of the US and are not as common here in Ontario.  In our trading area, most of the POS, Tax Sale properties or foreclosure properties are put on the MLS before they reach the point of foreclosure.  The reason for this is that our provincial laws are very strict about the procedure and marketing of a power of sale property and the company or person who is initiating the power of sale must do their best to obtain what is called TRUE market value as opposed to fair market value for the property, otherwise if the property is sold too far under TRUE market value, the owner could sue them for the difference.  Another reason is because power of sale is much less expensive remedy for the lender to attempt to get their money back. What's an estate sale? What is a Distressed Sale?   Why fix up run-down homes?  Sadly for the previous owner, the answer is simple: Your potential accelerated wealth creation. Adding value to run-down homes through quick cosmetic rehabs is one of the most powerful leverage tools available to property investors.  Traditional 'buy and hold' strategies are too slow for the investor looking for accelerated wealth creation.  On the other hand, buy and hold strategies show strong price growth over time and seem to work well here in Ontario and the GTA. Please understand that these are my personal thoughts and experiences, do not use my information herein as legal advice and always professional seek legal advice on any issue pertaining to real estate and especially Power of Sale. You may use this form to subscribe to automatically receive power of sale and bank sale listings in Mississauga, Oakville and the GTA.