Real Estate Without Borders

Episode: Navigating Real Estate Challenges: Power of Sale vs. Foreclosure

Date: August 22, 2025
Hosts: Dan (A), Dave (B), Guest/Contributor (C)

Episode Overview

This episode dives into critical differences between "Power of Sale" and "Foreclosure"—two key legal processes impacting lenders, borrowers, and investors, particularly within Ontario, Canada, and the U.S. The hosts share first-hand experiences and address practical risks, legal nuances, and common misconceptions around scoring deals during these distressed sales. Later, the conversation branches out into the world’s richest individuals by country and explores global saving and debt behaviors, linking these trends back to international real estate and investment strategies.

Key Discussion Points & Insights

1. Real-World Experience with Power of Sale

• Dave’s First Power of Sale Deal (00:30–01:21):
  Dave shares his initial experience handling a "Power of Sale" property in Toronto. Despite many years in real estate, this was his first such encounter—and a challenging one.

• Friendship & Support Among Realtors (00:18–00:44):
  The hosts highlight the importance of mutual support and camaraderie in the real estate business, especially when handling stressful or complex deals.

2. Power of Sale vs. Foreclosure — Legal & Practical Differences

• Definitions and Mechanisms (01:21–02:42):

  • Power of Sale:
    • Lender forces sale if the borrower defaults, but generally doesn't take title.
    • More common in Ontario/Canada.
    • Lender must try to get fair market value to avoid future legal disputes.
  • Foreclosure:
    • Lender assumes title, sells property directly.
    • More common in U.S., can lead to steeper discounts as lender is more motivated to "clear inventory."
  • Key Quote:
    "They have to legally show that they tried to get fair market value for the property. It’s not like they can just fire sale it." — Dave (03:47)
  • Common Misconception:
    Many investors think foreclosures and Power of Sale always mean a "sick deal"—rarely the case in practice.

• Risks in Power of Sale Deals (05:16–09:17):

  • The original owner can "redeem" (reclaim) their property up to two days before closing by settling debts, putting buyers at risk of a collapsed deal late in the process.
    • Example: Dave details a case where his buyers could have lost their condo days before closing—even after giving notice to their landlord.
    • Quote:
      "They’re giving notice to their landlord...and two days before closing, they could lose the whole deal." — Dave (05:49)
  • Extra caution needed for first-time home buyers: "Very intimidating...all the sheriff’s entry notices and stuff. The condo was in disarray." — Dave (09:49)
  • Lenders often refuse to include certain buyer protections, e.g., HST (tax) inclusion, due to uncertainty about the property's prior business use, shifting tax risk to buyers.

• Commission & Fees:

  • Commissions are paid by the lender but added to the damages claimed from the borrower (05:09–05:15).

• Lack of Representations or Warranties:

  • Lenders cannot provide info or warranties about property condition; properties sold strictly "as is, where is."
  • "The lender really can't make any representations about the property...they just cannot do like any representations or warranties." — Dan (09:17)

3. Lessons Learned and Real-Life Outcomes

• Deal Outcome:
  Dave ultimately advised his clients to walk away due to risk (11:11–11:44).
  • Quote:
    “The reward didn’t outweigh the risks...it wasn’t a great one. The deal didn’t go through.” — Dave (11:11)

4. Global Wealth: Who Are the Richest?

• Segment Start: (12:11) Comparison of every country’s richest billionaire and countries that save the most.

• North America:

  • U.S.: Elon Musk — $342B
  • Mexico: Carlos Slim (Telecom) — $82.5B
  • Canada: Changpeng Zhao (Binance, Crypto) — $62.9B (13:21)
  • Memorable Moment: Surprise that Binance's CEO is Canada’s richest.

• Central/South America & the Caribbean:

  • Fun fact: Rihanna is the richest in Barbados at $1.4B thanks to Fenty Beauty and other ventures (14:49–15:19).
    • "Good for her. I love seeing people win. Rihanna just went from singer to...Fenty Beauty, 550 million in the first year." — Dave (15:04)

• Europe:

  • France: Bernard Arnault (LVMH) — $178B
  • Italy: Giovanni Ferrero (Ferrero Rocher, Nutella, Kinder, Tic Tac) (18:23–19:29)
  • Spain: Amancio Ortega (Zara)
  • Lots of personalities and playful tone exploring brand empires ("This guy gets it, Italians get it, man!").

5. Where Do People Save the Most?

• Highest Household Savings Rates in OECD Countries (2022): (20:17–21:13)

  • Switzerland: 19.3%, followed by Sweden, Netherlands, France, Germany.
  • Surprise: Some high-saving countries also rank high in household debt.

• Household Debt-to-Income:

  • Canada, Switzerland, Netherlands all top the list for both savings and debt-to-income ratios (21:33–22:15).
  • "You would think a good household savings rate means people are financially responsible...but it could just mean they’re not paying debt down." — Dan (23:05)

• Possible Reasons:

  • Cheap debt (e.g., Sweden's long-term low interest rates) makes it rational to save and maintain debt.
  • "We got to go to Sweden and get some cheap loans, bring it over here to Canada." — Dave (25:57)

• Carry Trade Concept:

  • Borrow cheaply in one country (like Japan), invest elsewhere for higher return (26:04–26:28).

6. Global Trends, Real Estate & Investing Lessons

• Big Picture:
  • Understanding legal structures like Power of Sale/Foreclosure, alongside macroeconomic trends (wealth, savings, debt), is crucial for globally minded investors.
  • "By learning different things, you can maybe see investing from a higher up lens." — Dave (27:03)
  • Fun, unscripted exploration intended to foster broader, savvy thinking.

Notable Quotes & Memorable Moments

• On Friendship and Real Estate:
  "Honestly, it’s so powerful having a friendship like that...we can, you know, go through these hilarious life work events together." — Dave (00:30)

• On Common Misconceptions:
  "A lot of people see foreclosure or power of sale and they get excited and think they're going to get a sick deal. It's very rarely the case." — Dan (02:44)

• On Buyer Risk:
  "Two days before closing they could lose the whole deal." — Dave (05:49)

• On Power of Sale Listings:
  "You'll see those listings in 'as is, where is' condition and they will not budge from that." — Dan (09:24)

• Humor & Team Spirit:
  "We're battling it out for who gets to be the most hated profession of the year." — Dan (08:28)

Timestamps for Major Segments

• Real Estate Therapy and Friendship: 00:01–00:44
• Power of Sale vs. Foreclosure Explained: 01:21–04:50
• Risks, Commission, Buyer Concerns: 05:09–11:44
• Fun: The Richest Person in Every Country: 12:03–19:29
• Global Savings & Debt Patterns: 20:11–26:28
• Global Investing Takeaways: 26:42–27:44

Conclusion

This episode provided an honest look at the practical and legal challenges of distressed property sales, especially in international contexts. It emphasized the need for careful due diligence and understanding risk, while also making global finance—and the stories of ultra-wealthy individuals—both accessible and entertaining for real estate professionals and investors.

“The reason we made this podcast is to help people understand not just global economics, but global trends and real estate all around the world...it all sort of ties back together.” — Dave (27:06)