Power Of Sale vs Foreclosure
Power of sale is a lender sale process common in Ontario where title does not transfer to the lender. Foreclosure is a court process where the lender may take title and extinguish borrower equity.
Why it matters
power of sale vs foreclosure can change after-tax proceeds, legal risk, carrying cost, and closing certainty. Ignoring it can turn a good spreadsheet into a bad real deal.
Worked example
In underwriting, tag power of sale vs foreclosure beside the exact source input and rerun the model when that input changes. The point is not a pretty metric; it is a better buy, hold, refinance, or walk decision.
How investors read it
Use it to kill bad deals quickly. If the back-of-envelope version does not survive conservative assumptions, do not spend five hours making it look alive.
Common mistakes
- · Treating the metric as a verdict instead of a screen.
- · Using broker-package assumptions without checking the source documents.
- · Ignoring taxes, capex, vacancy, financing terms, and timing.
Canadian tax, legal, municipal, and provincial rules change. Treat this as investor education, not legal or tax advice; confirm with local counsel/accountants.