How is buying property from a bankruptcy trustee different from buying through power of sale?

Both are distressed-purchase situations, but they arise from different processes and involve different sellers. A power of sale is a specific remedy a secured mortgage lender exercises under the Mortgages Act after a borrower defaults, and the lender itself conducts the sale outside of any general insolvency proceeding. A bankruptcy trustee sale, by contrast, happens once a person or company has actually become bankrupt under the federal Bankruptcy and Insolvency Act, and a licensed trustee administers and sells the bankrupt's assets, including real property, for the benefit of creditors generally rather than a single secured lender.

Practically, both involve a seller who was not personally living in or managing the property in the ordinary sense, both are typically sold "as is" with limited representations, and both can raise vacant possession and financing challenges for a buyer. Where they differ is in oversight and process - a bankruptcy trustee's sale of significant assets often involves the bankruptcy court, inspectors, or creditor input, while an ordinary residential power of sale generally does not require prior court approval at all.

Ask early which process actually applies to the property you are considering, since it affects who has authority over the sale and what approvals, if any, were required.