Power Of Sale – What It Means For Buyers

power of saleA Power of Sale situation refers to a bank that has secured a property due to bad debt and is selling it at market value to recover costs. Frequently, buyers find exceptional good value in a power of sale. However, keep in mind the bank does not know the details about the property. They don’t know if there is a stove, fridge, dishwasher, or laundry. They don’t know if there is rental equipment. They don’t know if there is work to complete. They can’t guarantee vacant possession and they don’t know if HST is due or not even if common sense suggests that the property will be vacant on closing and that HST tax is not due residential property. This is where a Real Estate broker is so helpful!

A market price is set using an appraisal and the public can view the home and make an offer. The offer is sent directly to lawyers who work on behalf of the bank and they accept or counter the chosen offer. A Power of Sale can be a good opportunity to own a special property. Call for details.

RE/MAX Hallmark Ottawa Realty Group 613-236-5959
2517 Manse Road, Ottawa, Ontario, Canada

What is A Power of Sale Property?


Power of sale means the bank has exercised it’s right to take control of a property where the owner has failed to honor their obligations under the terms of the mortgage. In USA the term used for Power of sale is foreclosure or distressed homes.
The bank acts to sell and get back the funds lent to the owners. Any extra money received from the sale is returned to the owners. In taking over the home the owners are evicted from the property by the sheriff . The locks are changed and the home secured.
Sometimes these properties are bargains and at other times they are just good value! This one is in the Orleans / Avalon community is in very nice condition. We will stage the home tomorrow wash the walls and take additional photos. Open house this Sunday with offers presented from August 8. Offers can only be received after the property has had a week of exposure on the open market making it fair for all buyers and of course for the original mortgage holder. The property must be sold at market value.
Interestingly, the offer on a power of sale accepts some additional risks on the buyers side and that is because the Bank can’t guarantee chattels, taxes, or the state of the roof shingles or the furnace because it doesn’t  have knowledge of the state of these things.
A experienced buyer can do very well in a power of sale. There is one additional risk. If the original owner were to win the lottery they could buy back the debt or redeem the mortgage and take control of the property even if the new buyer had signed  binding offer with the bank, but I’ve never heard of that happening. When they win the lottery in Ottawa they move to Wesboro! ha ha ha