What are the pros and cons of buying a property in foreclosure?

One pro is that you can usually get a pretty good deal on the property. Sometimes though, you can end up competing with other offers, which could mean a price increase (or earlier closing date, or fewer conditions).

One con is that you are making the purchase "as is." There are no warranties that anything works; you may be facing extensive renovations. But if you and your Realtor do your 'homework', the surprises on closing day should be negligible to non-existent.

Be prepared to move quickly when you come upon the property you want (have your finances in order before you start)and be sure you make an informed choice/decision. (You can never ask too many questions!)

Lets deal with cons first. The home may be in such a condition that you would have to do major renovations. Always know what you are getting into. One of my clients bought a power of sale home only to find major deficiences that ended up costing him a lot of money. A good home inspector is a must.
With the real estate market the way it is, power of sale homes sell at market value recently. You could get a better deal in bueyrs market but we are currently in sellers market and lack of inventory drives sellers to bid on these homes believing they are getting a deal
I'd say, buyer beware

Hi Liz
It's important to distinguish between a Power of Sale and a Foreclosure. They are two completely different processes.

Typically, in Canada banks use the Power of Sale option.
There are a few things that are important to know when dealing with a power of sale.

-First of all, there seems to be a belief that power of sales typically are sold below market value. That is a misconception. Banks have an obligation to sell the home at market value.

-Secondly, you have to be aware that the home is sold "as is". There are no warranties whatsover. If you buy the home and later find out there is constant flooding in the basement for example, you have no recourse.

-thirdly and most importantly is the "right of redemption". This means that the original owner (who defaulted on the payments) has up until the day of closing on your offer to pay back his default and regain possession of the property. In other words, you could firm up an offer to purchase the property, expect to move in on your closing day, only to find out that the property has been redeemed by the original owner. This is why it's important to ask for a quick closing when purchasing a Power of Sale.

There are a lot of details that are important to know, that's why it's best to deal with an agent who has a good understanding of the process when purchasing a power of sale.

You might get a deal but not necessarily. Banks, Financial Institutions have an obligation to sell the subject property at a fair market value.
The property is sold in As Is Condition.
The previous owner has the right to redeem the property on or before the completion date of the transaction.
Be aware!

Best of luck.
Maria