Everything a normal listing takes for granted — seller disclosure, warranties, a motivated closing partner — is absent, because the seller is the lender enforcing a defaulted mortgage, not a homeowner.
Short answer
A power of sale listing is marketed like any other — MLS, a real estate agent, a normal-looking offer process — but the seller is the lender, not the homeowner, and the agreement is rewritten entirely in the lender's favour: sold "as is, where is," with no representations, no warranties, and no seller disclosure of any kind.
The lender sells "title free of the interests ranking behind the mortgage being enforced" — second mortgages, later liens and later executions are all cleared off at closing. What it does not clear is anything that ranked ahead of that mortgage: a prior charge, prior easements and restrictive covenants, and municipal tax arrears “stay with the property.” A buyer's agent has to confirm which mortgage is actually being enforced — via the parcel register — before assuming everything ahead of it is gone too.
The purchase agreement is "a schedule that deletes most of the standard clauses." The property is sold “as is, where is,” and the lender "typically gives no representations or warranties about the property's condition, systems, appliances, square footage, zoning compliance, or anything else." That specifically means "no heads-up about a leaky roof, an aging furnace, knob-and-tube wiring, a wet basement, an old oil tank, or unpermitted work." If the borrower redeems the property or files for bankruptcy before the sale closes, the lender "reserves the right to terminate," and the buyer's deposit is "returned, usually without interest, and expressly your only remedy" — there is no lender to sue for the lost deal.
Nobody is going to disclose it, so the agent has to find it: occupancy status, since "nobody guarantees vacant possession"; tax arrears, via a tax certificate; and, on a condo, common-expense arrears, which "can rank ahead of the mortgage and become yours." Because there is no seller disclosure and no representations to rely on, an inspection condition and a financing condition are doing more work in a power of sale deal than in an ordinary resale — push for both before a client waives anything, and make sure they understand a firm offer here means "waiving protections blind."
See also: power of sale, defined, a case file on a buyer's power-of-sale expectations and whether a buyer really needs title insurance.
Confirm the arrears, the occupancy status and the redemption risk before an offer goes firm.
