I visited a house for sale that looked interesting for a potential flip project and or a reno/rent/hold... unfortunately, it was a Power of Sale. There's a strong preconception among the general public that "Power of Sales" are deals, but are they really?

The answer to that of course is: it depends. For the most part in the Toronto Real Estate Market however, the politics, hype, condition, and baggage involved are hardly worth the effort - at least that's my opinion.

Before reading my rant here, it's probably advisable to get a little 411 on how Power of Sales in Ontario work by reading the blog I posted here on www.ThinkTorontoHomes.com .

Now back to business... this year we’ve run into Power of Sales quite a few times already. We won some, we lost some, and we chose not to get involved in some. Well why do I dislike (I'm using that word lightly right now) Power of Sales so much you ask? For many reasons including the following to name a few:

• Lack of Control: on the buying side, both the Buyer and the Buyer Agent have pretty much no control in the process at all. The story isn't much better for the Seller Agent since he/she is also at the mercy of the Bank or Lender, who work with their own set of rules. There is usually no direct face to face contact with the Mortgagee and the Agents except via the handy fax machine – thus, no real negotiation.

• No Sense of Urgency: there is no rush for the Mortgagee to just get the deal done as soon as possible (even though it should appear that way since the property is usually empty and costing them money to carry) as they have to adhere to the guidelines set out in the Mortgage Act to sufficiently expose the property by ensuring the listing is for the usual period of such properties. Thus, even though they get a great offer, they sometimes just don’t accept them. Didn't anyone tell them that the first offer is usually the best offer?

• The Waiting Game: the Mortgagees plainly work on their own time as they typically require at least 48 to 72 hour irrevocable periods to respond to offers. I mean, how long does it really take for them to make up their mind? Try being a first time buyer waiting for the lender to respond to your offer while potentially missing out on other suitable properties. Sometimes negotiations can drag on for weeks, when transactions typically get completed the same day.

• Real Estate without Emotions: for the bank, it's literally a liability, a numbers game, a business decision and they don't have that special ingredient in their decision making process called emotions.  Given that most real estate decisions are made emotionally and then justified logically after the fact, it doesn't bode well.

• Caveat Emptor - Buyer Beware: the bank provides absolutely no warranties or guarantees in the purchase, so it's pretty much buy at your own risk.  You can try to put in clauses to protect the buyer, but the bank will literally cross them all off.  If it's there when it closes, then it's yours and if not, too bad.  If it works, great and if it doesn't, well it sucks to be you.

• Money Talks: is it really a deal? Given that the Mortgage Act requires that the bank get numerous appraisals from various parties and it's all a game of politics, contrary to popular belief, power of sales aren't always bargains.  Lenders typically price their property for a 30 day sale and if it's there for longer than that, then they usually start repositioning the price, but when it first comes out and an offer comes in right away, you'll be lucky if they even look at it.  After it sits for awhile, they aren't shy to drop it so that's usually when you get the best "deals" on these power of sales.

So there you have it... the real deal on power of sales.   Oh and that house I was talking about?  Well I saw it the night it came out and they wouldn't review any offers... so I waited... and I waited... and now, 6 days after it originally came out, they've got 3 offers the last time I checked.  Bidding on a power of sale?  No thank you!