What is “Power of Sale” and What Does it Mean to Toronto Home Buyers?
The recent stormy financial atmosphere across Canada, including Ontario and Toronto, has led to an increase in homes sold by the bank, sold under what is called “Power of Sale”. Homes sold by the bank are typically ones in which the former homeowner unfortunately could not pay their mortgage.
"Power of Sale" homes require extra caution on the part of Toronto homeowners.
The agreement may have a lot more clauses included in a schedule to the agreement of purchase and sale than the average home buying transaction, such as:
The buyer is responsible for their own inspection and appraisal, as well as accepting the property as is with regards to the state of repair.
Any information provided by the seller/lender should be verified by the buyer or their representatives and it is the buyer’s responsibility alone.
If at anytime prior to closing the original owner can pay their mortgage back up to date, the transaction is voided.
It’s no secret that a lot of these homes have some heartache attached, but headaches can be abundant too. It’s very wise to have your lawyer look over the lengthy, complicated document to ensure that you’re okay with the many clauses involved in these power of sale homes. You are also within your rights to make the offer conditional on your obtaining a mortgage, being happy with the home inspection, checking up on what the seller has told you, and having your lawyer approve the lender’s schedule to the agreement.
What is “Power of Sale” and What Does it Mean to Toronto Home Buyers? is a post from: Toronto Real Estate Updates