Will you get a great deal if you buy a Guelph Power of Sale? Maybe. Then again, maybe not.
A home listed under Power of sale isn’t really different from any home for sale, in that you must evaluate the price based upon factors such as location, condition, features, and market conditions.
Sometimes, I’m asked if buying a Power of Sale means that you are buying a property for the amount of the outstanding mortgage. Nope. Actually, the outstanding mortgage amount has nothing to do with the list price set by the lender.
Power of Sale homes are listed with the goal of selling the property for fair value, as determined by a number of steps taken by the lender, whose client (the home owner) is in default of their mortgage. Those steps likely include an appraisal (or appraisals) and consultation with a Real Estate Agent. Power of Sale homes are listed side by side on the MLS with other properties, some of which might actually be better “deals,” depending on a lot of factors, including the motivation of the Seller.
This isn’t to say that as a buyer, you can’t get a good price for a Power of Sale home. Just don’t expect to pay pennies on the dollar, because the system doesn’t work that way.
Here is a recap on the differences between Foreclosures and Power of Sales.
