Power of Sale in Ontario: A Buyer's Guide
Quick answer
Power of sale is the process Ontario lenders use to sell a property when the owner defaults on the mortgage — it's faster than foreclosure and the lender sells to recover what it's owed, with surplus going back to the borrower. For buyers, power-of-sale homes can offer value but are usually sold 'as-is' with limited disclosure and no warranties, so inspections and legal review matter more, not less.
Power of sale vs foreclosure
In power of sale, the lender sells the property but the borrower keeps any surplus after the debt and costs are paid. In foreclosure, the lender takes title. Ontario lenders overwhelmingly use power of sale because it's faster.
How to buy a power-of-sale property
These come to market like normal listings, often marked 'power of sale' or 'as-is'. You offer as usual, but the lender's schedules typically remove representations and warranties — what you see is what you get.
Risks to manage
- As-is condition — budget for repairs and always inspect
- Limited disclosure and no warranties
- Possible occupants or liens — your lawyer checks title
- Emotional sellers are absent; lenders want a clean, firm deal
Key takeaways
- Power of sale is faster than foreclosure; surplus goes to the borrower.
- Homes are usually sold as-is with limited disclosure.
- Inspect thoroughly and lean on your lawyer for title.
- Value is real but so is the risk — do your due diligence.
Frequently asked
What does power of sale mean?+
A lender's right to sell a property after mortgage default to recover the debt, returning any surplus to the borrower.
Are power-of-sale homes cheaper?+
Sometimes — lenders want a quick, firm sale — but they're sold as-is with limited disclosure, so factor repair risk into your offer.
Is power of sale the same as foreclosure?+
No. In power of sale the borrower keeps any surplus; in foreclosure the lender takes title. Ontario mainly uses power of sale.