Buying a home is a dream for many—but what if there was a way to buy at a competitive price, sometimes even below market value? That’s where power of sale properties come in. These homes can offer unique opportunities for buyers, sellers, and investors—but they also come with their own set of rules and risks.
In this guide, we’ll break down exactly what power of sale homes and power of sale houses are, how they work in Ontario, and how you can navigate the process with confidence.
What Is a Power of Sale?
A power of sale is a legal process that allows a mortgage lender to sell a property when the homeowner defaults on payments. Unlike a foreclosure—where the lender takes full ownership first—power of sale allows the lender to sell directly to recover the money owed.
In Ontario, power of sale homes are far more common than foreclosures. Why? Because the process is faster, usually taking only a few months from missed payments to sale, which helps lenders recover funds quickly and reduces legal delays.
How the Power of Sale Process Works
- Missed Payments – Homeowner falls behind on their mortgage.
- Notice of Default – Lender issues a legal notice, giving the borrower about 35 days to catch up.
- Property Listing – If payments aren’t made, the lender lists the home for sale.
- Sale and Debt Recovery – The proceeds pay off the mortgage, fees, and legal costs.
- Surplus or Shortfall – Any extra funds go to the homeowner; if the sale doesn’t cover the debt, the borrower may still owe the balance.
Why Buyers Look for Power of Sale Houses
Power of sale properties can be attractive for three main reasons:
- Potential savings – Homes are often priced competitively.
- Faster process – Quicker than foreclosure sales.
- Opportunity for investment – Ideal for buyers willing to do renovations.
However, there’s no guarantee the home will be a “bargain,” and buyers must be prepared for repairs or legal complexities.
Advantages of Buying a Power of Sale Home
- Competitive pricing compared to similar properties.
- Faster closing timeline compared to foreclosure.
- Clear title transfer—lenders ensure there are no legal claims on the property.
Disadvantages to Keep in Mind
- Homes are sold “as is,” meaning no repairs or guarantees.
- Possibility of the previous owner or tenant still occupying the property.
- Less room for negotiation on price.
Steps to Buy a Power of Sale Property in Ontario
- Hire a Realtor Experienced in Power of Sale – This is a specialized process; you need expertise on your side.
- Get Pre-Approved – Deals can move quickly; financing must be ready.
- Do a Home Inspection – Even if optional, it’s essential.
- Have a Lawyer Review the Agreement – Protect yourself from unexpected costs.
Power of Sale vs. Foreclosure – The Key Difference
In Ontario:
- Power of Sale – Lender sells the home without taking ownership.
- Foreclosure – Lender becomes the legal owner before selling.
Because the power of sale process is faster, it’s the preferred method for lenders in Ontario.
Why Investors Seek Out Power of Sale Homes
For real estate investors, power of sale houses can offer strong ROI potential. Buying at a lower cost means more flexibility for renovations, rentals, or resale. With the right strategy, these homes can be profitable, especially in high-demand markets like Brampton and the GTA.
FAQs About Power of Sale Homes
1. What does “power of sale” mean?
A power of sale is a legal right in a mortgage agreement that allows the lender to sell the property if the borrower defaults. Instead of going through lengthy foreclosure, the lender lists the home directly and uses the sale proceeds to pay off the debt, interest, and legal fees.
2. Are power of sale homes always cheaper?
Not always. Lenders are legally required to sell at fair market value. While some homes may be priced lower to encourage quick sales, others—especially those in good condition—may sell close to market value.
3. Can I get a mortgage for a power of sale home?
Yes, but timing matters. Since these homes sell fast, it’s wise to get pre-approved before making an offer. Some lenders may have extra conditions, especially if the home needs repairs.
4. What risks should I know about?
The biggest risks are hidden repair costs, possible legal disputes over occupancy, and limited warranties. Always budget for repairs, do a professional inspection, and work with a lawyer familiar with power of sale transactions.
5. How do I find power of sale properties?
Many appear on MLS, but the quickest way is to work with a Realtor who specializes in these deals and has connections with lenders or banks. This way, you can learn about opportunities before they hit the open market.
Final Thoughts – Work With Brampton’s Trusted Experts
A power of sale home can be a great opportunity—if you approach it with knowledge and the right team. The process is faster than foreclosure, often offers competitive pricing, and can open the door to valuable investment opportunities.
At Team Arora, we have years of experience helping buyers and investors navigate power of sale houses in Brampton and across Ontario. From finding the right property to managing negotiations and closing, our expertise ensures you’re protected and positioned for success.
📞 Call Team Arora today to start your search for the right power of sale property in Brampton and the GTA.