In: Real Estate News21 Jan 2011
Perhaps you have seen the newspaper ads or the internet banners that say “Foreclosure Properties”, “Power of sales in Canada”, or “buy distressed properties”…perhaps if you “sign up” or “provide your contact information”, you will get access to thousands of powers of sales and get “great deals”?
If you see these ads, we suggest that you look the other way! Run! Don’t Call! Don’t sign up! Here’s why…
1. The Power of Sale homes sell for market value!
Each “Power of Sale” home goes on mls.ca/realtor.ca. All the other buyers looking for a home for sale will see the house. If it’s a good home and priced right, it will most likely sell for what it’s worth (which is market value – the same price as a similar home in the same area). Many people are under the impression that “Power of sale” houses will sell for thousands of dollars less and the buyer will get a “great deal”. This is often not the case. If a Power of sale home does sell for less, it’s most likely because many power of sale homes are “handyman specials”. These homes have usually not been well looked after. They need a lot of work. This is why they might sell for less than the average price, but they still sell for “market price” because everyone saw the home and had the opportunity to put in a bid.
2. Banks don’t want to lose money.
Banks lent the money to the owner that was unable to pay their mortgage. When the bank takes over the home, they try to sell it in order to make their money (and their expenses) back. Banks do not want to sell a home that they take over, for a cheap price. Banks are in the business of making money: not losing money. This is why you will often see “power of sale” homes not selling for thousands of dollars less than other similar homes.
3. The Foreclosure rate in Canada is very low.
In fact less than 1% of mortgages in Canada are in arrears. . This is very low. There are just not that many “power of sales” in Canada.
However, there are some Powers Of Sale in Canada. A Real Estate Agent can look on their local MLS board and see who the “owner” of the home for sale and occasionally the seller’s name is a bank (For example, the seller might be Royal Bank, CIBC, Home Trust).
4. Some Agents use the “prospect” of Power of Sales or distressed properties in order to get customers.
This is the main reason to not reply or inquire when you see ads for “Distressed properties” or “Power of sale” properties. Some real estate agents create websites and promise access to “cheap” properties. They do this because some people respond and end up becoming clients (so these ads do work – from an agent point of view!). However, most real estate agents are unable to search specifically for “power of sale” properties on their local MLS because most MLS databases do not have the ability to search by “owner” name. These properties need to be found by going “one by one” through real estate listings.
5. How to Find and Buy Distressed Properties, Power of sale properties, or foreclosures.
However, agents can find power of sale properties on their local MLS (by going one-by-one through listings), if that is what a buyer is interested in. So we would recommend (if you are looking for these properties) to contact an agent that you are comfortable with. It would be useful to find an agent who has experience with power of sale properties or is knowledgeable about the legal aspects of bank sale properties.
What buyers need to know is that there is no “special”, “secret” list of foreclosed homes or distressed properties. Looking for a home for sale at a low price takes research, patience, and knowledge. Instead of searching specifically for a bank sale, you should be looking at all homes for sale regardless of the seller or situation.
For all of your real estate questions please call PropertySold.ca Inc. today at:
1-855-900-SOLD and speak to a customer service representative. We have licensed real estate professionals on staff ready to take your call right now. List your property for sale by owner today. New! We now accept real estate listings from real estate agents and new home builders & developers. More Information »
Real estate news in Canada including buy and sell information, local market updates, guides, tips for Canadians in the real estate market.