Buying a Property under Power of Sale?

foreclosure

Before we get into what is involved in purchasing a property being sold under Power of Sale, it is important to differentiate between ‘foreclosure’ and ‘power of sale’:

Power of Sale is a clause written into a mortgage documents that allows the lender to sell the property in the event of default, in order to repay the mortgage debt. Foreclosure on the other hand, is a legal proceeding in which the lender gets a court order to terminate the right of the borrower to the property.

Buying a property from the homeowner itself is different from buying a property through power of sale – that is, when the lender is selling it. The following are a few factors you should consider:

  1. Don’t expect items such as refrigerator to be included in the sale – the lender may not have ownership of it.
  2. Remember that lender will not give any warranties about the condition of the property. Therefore, make sure your offer is conditional on how satisfied you are with a home inspection – this means, get a home inspection no matter what!
  3. Check to see if lender has included a ‘right of redemption’ clause: this means the sale can be cancelled if the owner repays the lender before the deal closes.
  4. There might be other clauses included. For instance, if there is a tenant on the property, the lender will not give any guarantee about the length of any lease or the amount the tenant may be paying in rent. If the property had a business running in it before the lender took over, or if it had been substantially renovated, then this extra HST has to be paid by the buyer on closing.
  5. Don’t expect a substantial discount on the property price as lenders usually sell at market rate  but consult a lawyer – sometimes, they just might be able to negotiate a good deal.

You may also want to get copies of the survey, inquire about permits and documentation that relate tot he property at your municipality offices, and talk to neighbours.

The key is to ask questions from your lawyer and real estate broker before you make an offer on a power of sale home.

If you are unable to connect with a lawyer prior to signing the agreement, make sure to include that it is “conditional upon the approval of the Buyer’s solicitor”.

Feel free to contact us if you’re looking to purchase a property under power of sale.

 

* If you’re looking to learn more about the process, feel free to read this post that we think might be helpful.

 


Advertisements
Posted in Real Estate | Tagged , , , , , , , | Leave a comment

Marriage…problems…Divorce!

Couple_KellyLegal_StockImage

The relatively high divorce rates over past few decades have compelled us to think and analyze the reasons that lead to such an outcome in any family. Family problems come very close to the basic problems of human nature. There are always issues of personal loyalty, betrayal, anger, revenge, misunderstandings, self-esteem, ego, education, achievements and monetary matters. The reasons for which couples seek divorce most of the time, is very frivolous. The cosmopolitan and stressful lifestyle is also one of the major contributing factors in family breakdowns. In most cases, couples are at loggerheads for quite some time and a small argument gives an outlet to their simmering tension that may lead to domestic violence and then finally to divorce.

Continue reading

Posted in Family Law | Tagged , , , , , , , , , | Leave a comment

Importance of a Will

Last will and testament document

Is your death a matter of concern for you? Are you anxious about what will happen to your family after your death? Do you believe that whatever you have earned in your lifetime should go to your loved ones after you are deceased? Does it ever bother you that you have not made a Will as yet for yourself?

If all these questions bring a frown to your face, questions in your mind, some thoughts, some plans or a determination to secure the future of your family with your assets, property and possessions, all you need is a “Will” for yourself.

What is a Will?

Continue reading

Posted in Wills and Estates | Tagged , , , , | Leave a comment