"Power of sale" gets a bad reputation it doesn't fully deserve. Buyers hear the term and picture a foreclosure horror story — but in Ontario, it's a specific, fairly routine legal process, and for a buyer who knows what they're looking at, it can be one of the more genuinely good opportunities on the market. Here's how it actually works, and how to tell a real deal from a headache.
Power of sale isn't the same thing as foreclosure
In the U.S., lenders typically foreclose — a court process where the lender takes title to the property outright. Ontario works differently. When a homeowner defaults on their mortgage, the lender's usual remedy is power of sale, not foreclosure. The lender never takes ownership; they simply exercise their legal right to sell the property to recover what's owed. The homeowner stays the registered owner until closing, and — importantly for the seller — any money left over after the mortgage, arrears, and costs are paid goes back to them, not the bank. It's a recovery process, not a punishment, and that shapes how these sales actually run.
How the process works, step by step
After a default, the lender issues a formal Notice of Sale under Mortgage to the borrower. Ontario law requires a minimum 35-day redemption period, during which the homeowner can stop the entire process by paying the arrears and reinstating the mortgage. Only once that window passes without redemption does the lender move to sell. From there, it's listed and sold much like any other home — often through a real estate agent, on the same MLS system — except the seller of record is the lender or their appointed representative, not the person who used to live there.
Why they're almost always sold "as-is"
A lender has never lived in the home and has no personal knowledge of its condition, so there's no Seller Property Information Statement and no representations or warranties on the property, chattels, or even, sometimes, on exact occupancy status. That's the trade-off buyers need to understand going in: you're not getting a disclosure to lean on if something turns out to be wrong. A full home inspection isn't optional here — it's arguably more important on a power of sale property than on almost any other kind of sale.
Financing and timelines are less flexible
Lenders selling under power of sale want a clean, defensible transaction that gets them off the loan — not a drawn-out negotiation. That usually means shorter closing windows and less patience for long financing conditions than you'd get from a typical owner-seller. Practically, this means having your mortgage pre-approval locked in and ready before you write an offer, not after.
Why they can be a genuinely good deal
A lender isn't emotionally attached to the number they list at — they want a fair, defensible sale price, not top dollar at any cost. That often means these properties are priced more conservatively than an owner who's anchored to what they "need" to walk away with. They're also rarely staged or marketed with the same polish as a typical listing, which means they generate less of the emotional bidding-war energy that inflates prices on move-in-ready homes. For a buyer willing to do the legwork — inspection, a lawyer who knows what to check, financing sorted in advance — that combination is where the real opportunity lives.
What to actually watch out for
- No seller disclosure — you're relying entirely on your own inspection and due diligence, not a Seller Property Information Statement.
- Occupancy can be unclear — some power of sale properties are vacant, others may still have the former owner or tenants in place, which can complicate possession.
- Title and liens need a careful lawyer's review — arrears, unpaid taxes, or other registered claims aren't always obvious from the listing.
- They're not automatically deep discounts — lenders have a legal duty to take reasonable steps to get a fair price, so some are listed right at market value.
- You're not the only one watching — investors track power of sale listings closely, so being ready to move quickly matters as much as finding one.
Where to actually find them in London & St. Thomas
There's no separate, hidden market for these — power of sale properties show up on the same MLS system as every other listing, usually flagged in the listing remarks as "Power of Sale," "Mortgagee Sale," or similar wording. The skill isn't finding a secret list; it's knowing what to look for in the remarks, understanding the process well enough to move confidently, and having financing ready so you're not the buyer who spots one too late.
Want me to flag these for you?
I can set up a saved search that surfaces power of sale listings across London and St. Thomas as soon as they hit the market, and walk you through the process on any one that fits. Every buyer I work with also gets my Buyer Protection Guarantee — if you're not satisfied with your home within 18 months, I'll sell it for free.* Reach out and let's talk through whether one of these makes sense for you.
