Many buyers have the same misconception about bank-owned properties: the bank does not plan to live in the home, so as long as it receives an offer, it will probably accept it.
That is simply not how it works.
We recently represented RBC in the sale of a Power of Sale property in Oakville. Although these properties are sometimes casually described as “foreclosures,” Power of Sale is the more accurate term for this type of transaction in Ontario.
The property attracted significant attention, but the way the bank handled pricing and offers may surprise some buyers.
How Is Selling a Power of Sale Property Different?
In a typical resale transaction, the real estate agent and homeowner discuss the listing price, offer strategy and negotiations together. The seller then makes the final decisions based on their personal goals and circumstances.
With a Power of Sale, the agent still provides market analysis, pricing recommendations and strategic advice, but many of the major decisions are ultimately made by the bank.
That does not make the agent’s job easier. In fact, the bank expects a high level of market knowledge, documentation and professional judgment.
The listing price, for example, cannot simply be set at whatever number the agent recommends. Pricing too high could discourage buyers and cause the property to sit on the market. Pricing too low may not be accepted by the bank either.
In addition to reviewing the agent’s comparative market analysis, the bank may arrange an independent appraisal to assess the property’s market value. The recommended listing price must therefore be supported by current market conditions and comparable sales.
The Bank Did Not Rush to Accept an Offer
Interest in this Oakville property began immediately. We received numerous inquiries on the first day it was listed, along with an offer from an interested buyer.
The bank, however, made it clear that it wanted to give the property one week of market exposure before formally reviewing offers. This allowed potential buyers enough time to view the home and consider the opportunity.
When the bank began reviewing offers one week later, we received three offers in a single day. One of them was already relatively close to the asking price.
Some buyers might assume that the bank would accept the best of the three and move on.
It did not.
After reviewing the price and terms of all three offers, the bank decided not to accept any of them. A Power of Sale does not mean that a property will automatically be sold at a discount. The bank still considers the property’s market value, professional appraisal and the overall terms of each offer. It does not have to accept an offer simply because one has been submitted.
The Final Result
After the initial offers were declined, we continued marketing the property, arranging showings and hosting open houses. We also stayed in contact with interested buyers and their agents.
Over 26 days on the market, the property generated:
- 42 private showings
- Nearly 60 open house visitors
- Four offers in total
- A final sale price of 99.4% of the asking price
The result shows that even in a more balanced market, a well-priced property supported by strong exposure, consistent follow-up and patient negotiation can still sell very close to its asking price.
What Buyers Should Know
A Power of Sale property is not automatically a bargain.
Buyers still need to evaluate the asking price, comparable sales, physical condition of the property, potential repair costs and the specific terms included in the Agreement of Purchase and Sale.
Some properties may offer excellent value, while others may only appear inexpensive at first glance. The label “Power of Sale” alone does not determine whether a property is a good deal.
Having an agent who understands this type of transaction can help you evaluate the risks, review the available information and prepare an offer that reflects both the property’s value and the bank’s expectations.
What Sellers Can Learn from This Sale
This case also offers an important lesson for regular homeowners preparing to sell.
The first offer is not always the best possible outcome. When a home is priced properly, given sufficient market exposure and supported by consistent marketing and follow-up, waiting for the right offer may lead to a stronger result.
Every situation is different, but accepting an early offer simply because it is available is not always the best strategy. The quality of the offer—including its price, conditions and overall terms—matters just as much as how quickly it arrives.
There are currently a number of Power of Sale and estate properties on the market. Whether you are preparing to sell a home or searching for a genuine opportunity, experienced advice can help you separate a true good deal from a property that only looks like one.
If you are considering buying or selling in Oakville or the surrounding area, contact The Fisher Group to discuss your options.
The Fisher Group
Royal LePage Oak Park
647-598-8488
[email protected]
