A power of sale home is sold by the mortgage lender after the owner falls behind on the mortgage. These homes are listed on the same MLS® system as every other home, but they're easy to miss and they sell on the lender's terms. I review these listings for buyers in London, St. Thomas and Central Elgin. Here's how that works and what to check before you offer.
How I find power of sale listings for you
There's no separate list. Lender sales are ordinary MLS® listings, usually flagged in the description with wording like “power of sale” or “mortgagee sale”. Keyword lists, including the big public ones, miss listings worded differently and pick up listings that only mention the term.
Coverage: London, St. Thomas and Central Elgin.
How: tell me your price range, areas and property type. I search the MLS® system for listings that mention power of sale or a mortgagee sale, read each one, and send you the ones that fit your criteria.
Limits: wording-based searches can miss a lender sale or catch a listing that only mentions one. I'll tell you what I can confirm about any listing.
Buying a power of sale home: what's different
Financing first, but it's not the whole answer. Have a pre-approval before you look. A pre-approval doesn't mean the lender has approved this particular home's condition or value, so leave room for that.
View it and plan the inspection. Access can be limited, and a vacant home may have the water or heat turned off. Find out what's allowed before you write an offer.
Have your lawyer review the lender's schedule before you sign. Lenders attach their own clauses, commonly with limited representations and warranties. The seller may not provide a Seller Property Information Statement. Your lawyer explains what you're agreeing to.
Understand the termination clause. The lender's schedule may let it end the agreement if it accepts payment from the borrower before closing. Have your lawyer explain the exact termination terms, what happens to your deposit, and the risks before you sign.
Closing. Your lawyer checks title, property tax and utility arrears, condo arrears if it's a condo, and the occupancy terms in the agreement.
Power of sale isn't foreclosure. In a foreclosure, ownership passes to the lender through court proceedings. A court-ordered (judicial) sale runs under the court's supervision. With power of sale, a court order is generally not required for the lender to sell, though related court proceedings may still happen.
Before you make an offer
Condition. Have your inspector and lawyer review the condition, any disclosures available, title and the lender's schedule. An inspection can't find every problem, and a vacant home may hide problems such as a leak nobody reported.
Occupancy. Some homes are vacant. Others may still have the former owner or a tenant living there. Check what the agreement says about possession.
Condo arrears. Order the status certificate, because unpaid common expenses can affect what's owed on a condo.
Insurance. Get a quote early. Some insurers treat a home that's been vacant as a higher risk.
Are power of sale homes cheaper?
Not automatically. A lender has to take reasonable steps to get a fair price, so many are listed close to market value, and investors watch these listings too. Where there's value, it's usually in condition: a home that needs work, or isn't presented well.
How I help power of sale buyers
Listings that match your criteria, reviewed by me before I send them.
Recent nearby sales and the home's sale history, shared in our conversation or through your free Sold Prices account, so you can judge the price.
An offer written for the lender's schedule, with your lawyer involved before you sign.
Inspection, financing and closing planned around the lender's timeline.
The mortgage lender sells a home after the owner defaults, using the power of sale in the mortgage and the Mortgages Act. It isn't a foreclosure. The lender sells the home without becoming its owner.
It can. The lender's schedule may let it end the agreement if the borrower pays what's owed before closing. Your lawyer should explain the exact termination terms and what happens to your deposit before you sign.
Most are, through a brokerage like any other home, often with “power of sale” or “mortgagee sale” in the description. Not all are labelled clearly, which is why I review the matches.
You can ask. Lenders often prefer short conditions. Line up your financing, inspection and lawyer early so you can keep the conditions that matter to you.
Often not in the usual form. Lenders commonly sell with limited representations and warranties and may not provide a Seller Property Information Statement. That doesn't remove all disclosure duties, but it puts more weight on your inspection and your lawyer's review.
General information, not legal advice. Listings I send are listed by other brokerages and show the listing brokerage. Andy Nagpal, Broker, eXp Realty, Brokerage · 226 581 9220 · 548 490 4577.
