Facebook
X
Pinterest
Copy Link
Quick answer: A power of sale happens when a homeowner falls behind and the lender sells the home to recover what it is owed. Listings in the GTA reached a two-year high in 2026. But these homes are not automatic bargains: lenders must try to get fair market value, and the discount is often only a few percent. You buy “as is”, with almost no information from the seller, and the owner may still stop the sale before closing by paying what is owed. Get a home inspection, read the bank’s schedule with your lawyer, and price it on recent sales, not on hope.
Key takeaways
- The lender is not the person who lived there. It knows little about the home and promises nothing.
- Expect a lender schedule that overrides many normal protections in your offer.
- If you are a homeowner behind on payments, a regular sale almost always leaves you better off than a power of sale. See the last section.
How power of sale works in Ontario
- The owner misses payments (usually at least 15 days in default).
- The lender sends a Notice of Sale, which gives the owner at least 35 days to catch up.
- If the owner can’t, the lender lists the home, usually with a real estate agent and on MLS.
- The lender has a legal duty to take reasonable steps to get fair market value. That is why “fire sale” prices are rare.
The real discount
Most power of sale homes sell close to market value. Some sell a few percent lower because of their condition, vacancy or the extra risk buyers take on. Very large discounts usually mean the home has serious problems.
Price it like any other home: compare recent sales of similar homes nearby, then subtract the cost of repairs you find in the inspection. Ignore the “power of sale” label.
What the bank’s schedule usually says
Lenders attach their own schedule to your offer. Typical clauses:
| Clause | What it means for you |
|---|---|
| “As is, where is” | No promises about condition, appliances, chattels or anything else. |
| No representations or warranties | The lender won’t confirm the age of the roof, past water problems, permits or whether a basement unit is legal. |
| Right to stop the sale | If the owner pays what is owed before closing, the deal can be cancelled. You usually only get your deposit back. |
| No survey, no repairs, short notices | You arrange and pay for anything you want checked. |
| Rental equipment and tenants unknown | The lender may not know about rental water heaters, furnace contracts or tenants. |
Your due-diligence checklist
- Home inspection (insist on access; vacant homes may have utilities off, so ask for them to be turned on).
- Check for winter damage: frozen pipes, mould, missing fixtures.
- Search open building permits and work orders with the city.
- Ask about tenants. Is anyone living there? A tenant’s rights may continue after the sale.
- Check for rental equipment (water heater, furnace, air conditioner) and liens.
- Get an insurance quote early. Some insurers are cautious about homes that have been vacant.
- Have your lawyer review the schedule before you sign, or make your offer conditional on that review.
Looking at a power of sale listing?
I will help you price it on real comparables and protect you through the bank’s paperwork.
Or call/text (647) 709-2814 · I speak English, Hindi and Punjabi
How to make a strong offer
- Clean but protected: keep an inspection condition if you can. If competing, inspect before offering.
- Flexible closing: lenders often prefer quick, certain closings.
- Proof of financing: a firm pre-approval makes your offer more attractive.
- Expect counteroffers and slower replies. Banks often need internal approval.
If you are the homeowner behind on payments
Power of sale is the worst way to sell a home. The lender adds legal fees and costs, the home often sits vacant, and you can still owe money afterward. You have better options:
- Call your lender as soon as you know you’ll miss a payment. Ask about payment deferrals, extending amortization or adding arrears to the loan.
- Get free credit counselling from a non-profit agency.
- Sell the home yourself, early. A regular sale usually brings a better price, and you control the timing.
- Talk to a lawyer as soon as you receive a Notice of Sale. Deadlines are short.
FAQ
Are power of sale homes cheaper?
Sometimes slightly, but lenders must try to get fair market value. Big discounts usually reflect the home’s condition.
Can the sale be cancelled after my offer is accepted?
Yes. If the owner pays what is owed before closing, the lender can usually cancel. Read the schedule carefully.
Is power of sale the same as foreclosure?
No. In a power of sale, the lender sells the home and must account for the proceeds. Foreclosure, where the lender takes ownership, is rare in Ontario.
Worried about your payments? Let’s talk privately.
Selling on your own terms is almost always better than a forced sale. A confidential call costs nothing.
Or call/text (647) 709-2814 · Gursimran (Guru) Tamber, Sales Representative, CENTURY 21 People’s Choice Realty Inc., Brokerage
Keep reading
General information only, not legal advice. Power of sale rules and lender schedules vary, so always have a real estate lawyer review your agreement.
Sources: Real Estate Magazine: Power of sale listings are rising · Ontario Mortgages Act (e-Laws)
ABOUT THE AUTHOR
Gursimran (Guru) Tamber, Sales Representative
CENTURY 21 People’s Choice Realty Inc., Brokerage · RECO registration #5027219 · CENTURY 21 Pacesetter Gold (2024) and Masters Silver (2023) award winner
Guru helps buyers, sellers and investors across the GTA, Hamilton and Waterloo. Before real estate, he spent close to two decades leading IT transformation projects for Fortune 500 brands across Asia, Europe and North America. He speaks English, Hindi and Punjabi.
