Yovan Gabric | REALTOR®Power of sale
What a power-of-sale listing is, what buying one as-is actually involves, and how to get the ones worth a closer look — each with a builder's read on the property.
The short version
A lender has to try for fair market value, so a power-of-sale home is rarely cheap for no reason. What makes one worth buying is usually the thing that makes other buyers nervous — condition, vacancy, as-is terms — understood properly and priced in.
When an owner falls behind on their mortgage, an Ontario lender can sell the property itself, without a court order, after giving formal notice and waiting out the notice period the law requires. That is a power of sale. Foreclosure, where the lender takes ownership through the courts, is far less common here.
The seller on the agreement is the lender, not the person who lived in the house. That one fact explains most of what is different about buying one.
A lender selling under power of sale has a legal duty to take reasonable care to get fair market value. Money left over after the debt is repaid belongs to the owner and other creditors, and a lender that sells too cheaply can be held responsible. So most are listed on MLS®, priced against comparable sales, often with an appraisal behind the number.
Some do sell for less than a similar home down the street — usually because of condition, a vacant house, or the as-is terms, not because the price was cut. The price reflects the risk. The question is whether the risk is priced correctly.
The lender has never lived there and will not tell you what it knows, because it knows very little. Expect the agreement to come with the lender's own schedule attached, and expect it to favour the lender.
Timelines tend to be tight and deposits firm. If the property has damage, your own lender or mortgage insurer may want repairs before they will fund, or an appraisal that reflects the condition. Have your financing confirmed for this specific property, not just pre-approved in general.
Before a property goes to anyone on the list, it gets the read I would give my own purchase: what is structural and what is cosmetic, what the repair list is likely to cost in trades and time, what the comparable sales say, and what the as-is terms leave you holding.
Every alert says two things plainly — what caught my attention, and what I would investigate before you offer.
Power-of-sale alerts
Two things arrive, only if you ask for them:
Seen one already? Send me the address and I’ll tell you what I’d check first.
This page is general information, not legal advice. Power-of-sale transactions are governed by Ontario law and by the lender’s own terms, which vary. Have a real estate lawyer review the agreement and any lender schedule before you are bound by it, and confirm financing for the specific property. Construction observations complement — not replace — a home inspection. Alerts are sent only to people who have asked for them.