Buying a Power of Sale property in Ontario can be the smartest financial move of your life—or a money pit if you go in blind.

Unlike a traditional home purchase where you are dealing with a homeowner who takes pride in their property, here you are dealing with a bank or lender who has one goal: recoup their money. They are not emotional, they are not sentimental, and most importantly, they are not liable for the condition of the home.

If you are a first-time buyer in the Power of Sale market, do not sign an offer until you have ticked off every item on this checklist.

1. The "Cash Buffer" Check

The Risk: Banks sell these properties "As Is." If you move in and find the furnace is dead, the plumbing leaks, or there is mold behind the drywall, the bank will not fix it. The Checklist Item: Do you have a contingency fund?

• Advice: Do not max out your budget on the purchase price. Set aside $10,000–$20,000 specifically for immediate repairs that might pop up in the first week.

2. The Financing "Appraisal Gap"

The Risk: You might win the bidding war at $800,000, but because the house is in rough shape, the bank’s appraiser might say it’s only worth $750,000. The Checklist Item: Can you cover the difference?

• Advice: Banks will only lend on the appraised value, not necessarily the purchase price. If there is a gap, you must pay that $50,000 difference in cash. Ensure your financing is rock-solid and your lender knows you are buying a distressed property.

3. The "Redemption Clause" Reality

The Risk: In Ontario, the original homeowner has the right to "redeem" the mortgage (pay off their debt) and keep the house right up until the last moment. The Checklist Item: Are you prepared for the deal to die?

• Advice: Every Power of Sale agreement includes a clause stating that if the owner pays up before the deal closes, the sale is void. You get your deposit back, but you don't get the house. Don't buy furniture or cancel your current lease until you have the keys in your hand.

4. The "Schedule A" Legal Review

The Risk: Power of Sale listings come with a massive legal document called "Schedule A." This document essentially strips away almost all your standard buyer rights. The Checklist Item: Has a lawyer reviewed the Schedule before you offered?

• Advice: Never sign a Power of Sale offer without a lawyer seeing it first. The bank’s schedule will state they make "no representations or warranties" about anything—including whether the additions to the house are legal or if there are environmental hazards.

5. The Deposit Strategy

The Risk: Banks don't like waiting for cheques to clear. They want to know you are serious immediately. The Checklist Item: is your deposit liquid?

• Advice: Be ready to provide a certified cheque or bank draft for at least 5% (sometimes 10%) of the purchase price within 24 hours of acceptance. A weak deposit is the fastest way to lose a Power of Sale deal.

6. The "Bully" Mindset

The Risk: These properties are sold on the open market (MLS). If it’s a good deal, you are not the only one watching it. The Checklist Item: Are you ready to move fast?

• Advice: Banks operate on business days. If a listing drops on Tuesday, don't wait until Saturday to see it. The best deals are often snapped up in 48 hours.

The Final Verdict

Buying a Power of Sale is not for the casual browser. It requires speed, cash liquidity, and a thick skin. But if you can tick these boxes, you are in a prime position to build serious equity.

Need a guide? We specialize in navigating the complex paperwork and risks of Ontario Power of Sales. Contact us today to get started.

The phrase "Power of Sale" often conjures up images of dramatic auctions on courthouse steps or banks handing over keys for pennies on the dollar. Reality TV and American real estate shows have created a mythology around distressed properties that simply doesn't apply in Ontario.

If you are hunting for a Power of Sale thinking it’s a guaranteed lottery win, you might be setting yourself up for disappointment—or worse, a legal headache.

Here are the top 5 myths about Power of Sale properties in Ontario, and the reality every buyer needs to know.

Myth #1: "Power of Sale" and "Foreclosure" Are the Same Thing

The Reality: In Ontario, they are two completely different legal processes.

• Foreclosure: The lender goes to court to take the title (ownership) of the property. If they succeed, they own the house entirely. If they sell it later for a profit, they keep every penny.

• Power of Sale: This is the standard method in Ontario (about 90-95% of cases). The lender forces a sale to recoup their money, but the title remains with the homeowner until the property is sold. Most importantly, if the house sells for more than the debt, the extra money (surplus) must go back to the homeowner, not the bank.

Myth #2: You Can Buy Homes for "Pennies on the Dollar"

The Reality: The bank is legally required to get "Fair Market Value." Many buyers think banks just want to dump the property for whatever they can get. This is false. Under Ontario law, lenders have a fiduciary duty to the homeowner to sell the property at fair market value.

• If a bank sells a home worth $800,000 for $500,000 just to be quick, the original homeowner can sue them for the lost equity.

• The takeaway: You can find deals, but don’t expect a 50% discount. The "deal" usually comes from the lack of bidding wars, not a bargain-basement list price.

Myth #3: The Bank is Hiding a "Secret List" of Properties

The Reality: Banks want maximum exposure to prove they got the best price. Because of that legal duty mentioned in Myth #2, banks must list the property on the open market (MLS) to prove they tried to sell it for the highest possible price.

• They cannot secretly sell it to a friend or a "VIP list" without risking a lawsuit.

• However, the "hidden" aspect is that these listings often don't say "Power of Sale" in the description. You need an agent who knows how to spot the specific legal clauses in the listing data that identify them.

Myth #4: You Can Lowball the Bank Aggressively

The Reality: Banks are often tougher negotiators than regular sellers. When you negotiate with a homeowner, you can appeal to their emotions (e.g., "We love your garden!"). When you negotiate with a bank, you are dealing with a spreadsheet.

• Asset managers have strict "floor prices" they cannot go under without approval from shareholders or insurers.

• They rarely accept lowball offers because it looks bad on their books. They would often rather let the property sit for another month than sell it for significantly under the appraised value.

Myth #5: The House is "Move-In Ready" (Or The Bank Will Fix It)

The Reality: You are buying "As Is, Where Is"—and that is terrifying if you aren't prepared. This is the biggest risk for buyers.

• No Warranties: If the basement floods the day after closing, or the previous owner took the furnace and light fixtures with them, the bank is not responsible.

• No Cleanup: Banks generally do not clean the property. You might inherit a house full of old furniture or junk that you have to pay to remove.

• The Clause: Power of Sale agreements include specialized schedules that override standard buyer protections. You need a lawyer who specializes in this to ensure you aren't signing away your rights.

The Bottom Line

Buying a Power of Sale can be a fantastic investment strategy, but it is not for the faint of heart or the unrepresented. The deals are there, but they require a sharp eye and strict due diligence.

Want to see what’s actually available? I scan the market daily for properties that show the "tells" of a distressed sale. Contact me today to get access to my curated list of opportunities that actually make sense.

Everyone loves a deal. In the world of real estate, the ultimate "deal" is often perceived to be a Power of Sale (Ontario’s version of foreclosure).

Buyers often imagine a secret list of bank-owned homes being sold for pennies on the dollar, hidden away from the public eye. But here is the reality check: In Ontario, banks have a legal duty to sell these properties for "fair market value." This means they must list them on the open market (MLS) to prove they got the best possible price, or risk being sued by the original homeowner.

So, if there is no "secret bank list," how do savvy investors and buyers still find these hidden gems before the bidding wars start?

The answer lies in knowing where to look—and who to know. Here is how you can find these opportunities before the general public catches on.

1. The "Pre-Power of Sale" Window

The biggest hidden gems aren't the properties already owned by the bank; they are the homes owned by sellers who are about to lose them.

When a homeowner falls behind on payments, there is a window of time before the bank legally takes over. This is the "Pre-Power of Sale" phase.

• The Opportunity: These sellers are highly motivated. They often want to sell quickly to salvage their credit and avoid the embarrassment of a forced bank sale.

• How to Find Them: This requires "ear-to-the-ground" tactics. As your agent, I monitor specific neighbourhood data and work with a network of mortgage brokers and lawyers who often know which homeowners are looking for a quick, private exit strategy before the bank steps in.

2. Spotting the "Silent" Listings

Believe it or not, many Power of Sale listings are sitting on Realtor.ca right now, but you would never know it.

Banks often do not splash "POWER OF SALE" across the headline because they don't want to signal desperation. Instead, these listings look like regular homes but contain specific "red flags" in the Realtor-only remarks that the public cannot see.

• The "Tell": We look for specific clauses like "Property sold 'as is, where is'" or "Seller makes no representations or warranties."

• The Strategy: I run specialized searches that filter for these specific legal phrases and lender names (e.g., "Bank of Nova Scotia" or "Home Trust") hidden in the ownership data. This allows my clients to spot a Power of Sale immediately, even if it’s not advertised as one.

3. The "Coming Soon" Network

Real estate is a relationship business. Before a property hits MLS, there is often a 24-48 hour period where word spreads among top-tier agents.

• The Insider Edge: Lenders and asset managers often have a roster of preferred agents they trust to handle these complex sales. By maintaining relationships with these listing agents, I can often get a "heads up" about a new distressed property coming down the pipeline days before it appears on your search app.

4. Private Lender Sales

While the big banks (TD, RBC, Scotiabank) almost always go strictly by the book with full MLS exposure, private lenders (B-lenders) operate differently.

• The Difference: Private lenders are sometimes more interested in a speedy recovery of their capital than a prolonged bidding war. Occasionally, these unique properties are circulated through private investor networks rather than the broad market.

Why You Need a "Power of Sale" Specialist

Buying a distressed property isn't like buying a regular home.

• The Risk: You are buying "As Is." If the furnace breaks the day after closing, or if the previous owner took the kitchen sink with them, that is your problem.

• The Reward: If you can navigate the risks, the price gaps can be significant.

You need an agent who knows how to spot the deal, but also knows how to protect you from the lemon.

🚀 Stop Searching, Start Finding

Stop waiting for these deals to pop up on public websites—by then, it’s usually too late.

You can sign up here an get on "Priority Access List." I offer a specialized service for clients: instant notification of new Power of Sale and Distressed Property listings that match your criteria, often before they are visible on public portals.

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