We get calls every day from people who are ONLY interested in a Foreclosure or Power Of Sale property in the Greater Toronto Area, because they THINK that they will get a great DEAL!
I don’t respond by explaining how you can usually find a more suitable property with a strategic property search through a Realtor …. just because I am a Realtor.
I explain the benefits of a strategic property search because after many years as a Professional Real Estate Investor, I have personally taught courses on buying Foreclosures/Power Of Sales … and … buying Tax Sale properties (in both Canada and the U.S.).
There are many misconceptions out there that must be clarified.
The first one is that the banks are not in the real estate business and only want to get the money that is owed to them on an outstanding mortgage. This might have been true in the United States at one point (I say that cautiously because the rules in the U.S. change almost weekly these days). However, it is not the case in Canada.
Power-Of-Sales rarely provide the buyer with a ‘good deal’ (in Canada that is). Plain and simply explained … in Canada THE ‘BANK’ HAS A LEGAL OBLIGATION TO SELL THE HOME AT FAIR MARKET VALUE!!!
And Fair Market Value of course is whatever the “market” in the area of that property will bear for that property. Many of the misconceptions about Foreclosures stem from media which originates in the United States. However, in the United States the laws and the procedures are VERY different in many cases.
For those of you who wonder what the difference is between “Power-of-Sale” and “Foreclosure”, the answer is very simple: “Power-of-Sale” is the Canadian terminology and “Foreclosure” is American terminology. Unfortunately the general public have come to use the terms interchangeably, which also leads to confusion between the different laws from country to country.
Another misconception is the difference (or similarity) between “Power-of-Sales” in Canada and Ontario Tax Sales.
“Power-Of-Sale” is in reference to a borrower (Homeowner) not maintaining payments to the bank (Lender) for the money borrowed to purchase the home. The Lender (under certain circumstances) has the right to force the sale of the property under Power-of-Sale to correct the situation.
Ontario Tax Sales on the other hand are in reference to the town (municipality) selling the property (through one or two varying forms of auction) to collect back-taxes owed, when a homeowner has not paid their property taxes for a specific period of time.
Learn more at: www.BlogTorontoHomes.com