A “bank sale” sounds like a bargain. Sometimes it is a good buy, but it’s a different kind of purchase, with different risks. Here’s how a power of sale works in Ontario and what to check before you make an offer. Checked October 8, 2026.
What is a power of sale?
When an owner stops paying their mortgage, the lender can sell the home to recover the debt. In Ontario this is usually done through a power of sale under the Mortgages Act, not through a court foreclosure. The lender, not the owner, signs the agreement as the seller.
The timeline the law sets
- The mortgage must be in default for at least 15 days before the lender can give a notice of sale.
- The lender can’t sell until at least 35 days after that notice is given.
- Until the sale, the owner can still pay what’s owing (the arrears plus the lender’s expenses) and stop the process.
That last point matters to a buyer: a deal can end before closing if the owner pays. Your lawyer should explain how the lender’s agreement handles this.
What’s different about buying one
- The seller never lived there. The lender usually knows little about the home’s condition, and its agreement usually says it gives no promises about it.
- “As is.” Lenders usually add their own schedule to the offer that limits what they’re responsible for. Read it with your lawyer before you sign.
- Occupancy. The home may be vacant, or the owner or a tenant may still live there. Ask what “vacant possession” means for this home.
- Fixtures and chattels. Appliances or fixtures may be missing, or not included.
- Your title. Once the lender has given its notice under the Mortgages Act, the Act protects the buyer’s title from being challenged later over how that notice or the default was handled. Title insurance and your lawyer’s review still matter.
Is it cheaper?
Not automatically. Lenders usually list close to market value, and good power-of-sale homes can still get several offers. Compare with recent sales nearby before you decide what to offer.
Checklist before you offer
- A mortgage pre-approval in hand. See what lenders ask for.
- Recent comparable sales for that street or building.
- A home inspection (or an inspection condition), especially for a home nobody has lived in for a while.
- Your lawyer reviews the lender’s schedule before you sign.
- Ask about occupancy, keys and access, and what’s included.
- Budget for repairs, plus your usual closing costs (or run them in the closing costs calculator).
- Title insurance through your lawyer.
How I can help
I can send you power-of-sale homes that match your area and budget, compare each one with recent sales, and walk you through the lender’s paperwork before you sign. Book a free 20-minute session in October, in person in Mississauga or Kitchener-Waterloo, or by phone.
Sources (official pages, checked October 8, 2026)
Programs and limits change, often at budget time. Confirm the current rules on the official page before you rely on them.
Talk to me in English or Arabic: call or text (647) 465-3710, message me on WhatsApp, or email Mohieddinrealtor@gmail.com.
General information only – not financial, legal or mortgage advice. Please consult a licensed professional about your own situation.