Power of Sale properties are attracting attention in Ontario’s 2026 housing market, particularly among buyers hoping to find homes below market value. But the idea that every lender-controlled property represents a bargain is misleading.

A Power of Sale is primarily a way for a mortgage lender to recover money after a borrower defaults. For buyers, that means these properties should be evaluated just as carefully—if not more carefully—than conventional listings.

How Does a Power of Sale Work?

In Ontario, a Power of Sale allows a lender to sell a mortgaged property following a default without first becoming the property’s owner through foreclosure.

Under Ontario’s Mortgages Act, notice requirements and waiting periods apply before the lender can exercise this right. In the statutory process, notice can generally be given after the mortgage has been in default for at least 15 days.

The proceeds from the eventual sale are applied toward costs associated with the sale, interest and other amounts owing, and the outstanding mortgage principal.

Is a Power of Sale Property Cheaper?

Not necessarily.

A lender may be motivated to recover its outstanding debt, but that doesn’t mean the property will automatically be listed below market value. Some Power of Sale properties can even be priced above what comparable homes have recently sold for.

Buyers should therefore analyze recent comparable sales rather than assuming the words “Power of Sale” indicate a discount.

Expect an “As Is” Purchase

Power of Sale properties are commonly offered on an “as is, where is” basis. The lender may have limited knowledge of the property’s history and condition and may provide fewer representations and warranties than a traditional homeowner.

Buyers should carefully investigate the condition of the property and understand which fixtures, appliances, or other items are included in the transaction.

Due Diligence Becomes Even More Important

Before submitting an offer, buyers should consider:

• Reviewing recent comparable sales
• Arranging a home inspection when possible
• Having a lawyer examine the purchase agreement and title
• Confirming financing before making an offer
• Investigating outstanding liens or other title-related concerns
• Budgeting for repairs and unexpected expenses

The terms of a lender’s agreement of purchase and sale may also differ from those in a conventional transaction, making independent legal advice particularly important.

Don’t Let the “Deal” Drive the Decision

The purchase price is only one part of the equation. A property requiring significant repairs, carrying additional legal complexity, or priced above comparable sales may offer little financial advantage.

Instead, calculate the property’s realistic market value and total acquisition costs before deciding whether the opportunity makes sense.

Power of Sale homes can create opportunities for Ontario buyers, but they’re not guaranteed bargains. In 2026, the smarter approach is to evaluate each property based on comparable sales, condition, financing requirements, legal terms, and total costs.

A Power of Sale describes how the property is being sold—not whether it’s a good deal.