True foreclosures are rare in Ontario — most lender-driven sales here are Power of Sale (POS) under the Mortgages Act, not judicial foreclosure. The distinction matters legally, but for buyers the practical experience is similar: a property sold by the mortgagee on an as-is basis, often without typical seller representations and warranties. Here is how to find and buy them safely in 2026.
In this guide, we cross-reference How to Buy a House in Ontario, Credit Score to Buy, and Fair Market Value — click through whenever you want to go deeper on a related concept.
Power of Sale vs Foreclosure — The Ontario Reality
Under Power of Sale, the lender (mortgagee) sells the property and any surplus over the debt goes back to the borrower. Under judicial foreclosure (rare), the lender takes title and any surplus is theirs. Power of Sale is faster and the dominant tool in Ontario.
Where to Find Power of Sale Listings
- TRREB MLS — listings often note "Power of Sale" or "As Is, Where Is" in remarks.
- Realtor.ca and HouseSigma — search remarks for "Power of Sale".
- Specialty sites that aggregate POS listings.
- Sheriff's sales (rare; for tax sales not mortgage defaults — see municipal tax sale lists).
What "As Is, Where Is" Means
Power of Sale offers come with no representations or warranties — the lender does not know if the furnace works, if the roof leaks, or if the basement floods. You take the property in whatever condition exists at closing. Inspection is essential.
Making an Offer on a Power of Sale
Use the standard OREA Form 100 with a Schedule B for Power of Sale terms. Expect:
- A larger irrevocable period — the lender may need 5–10 business days to consider.
- A higher deposit requirement (often 10%).
- No vendor warranties or representations.
- Vacant possession may not be guaranteed — confirm.
- The lender's right to accept any other offer received before yours is signed back.
Risks to Plan For
- Hidden defects — budget for unforeseen repairs.
- Outstanding utility, condo or property tax arrears the lender has not paid.
- Tenant in possession — Ontario tenants have strong protections under the RTA.
- Title issues — the lender's lawyer will discharge the mortgage but may not address other liens before closing.
Get a Real Estate Lawyer Early
Have your real estate lawyer review the Schedule B and any title issues before you sign. Power of Sale closings are not the place for boilerplate legal review.
Frequently Asked Questions
Are foreclosure homes cheaper in Ontario?+
Sometimes — but the lender has a duty to obtain fair market value, so significant under-market discounts are uncommon. The discount usually reflects condition risk and the absence of seller warranties.
Can I do a home inspection on a Power of Sale?+
Yes, and you should. Make inspection a condition of your offer. The home is sold as-is, so the inspection is your only protection against hidden defects.
Are there real foreclosures in Ontario?+
Yes, but rare. Judicial foreclosure under the Mortgages Act is available, but Power of Sale is faster and dominates GTA distressed sales.
Do I need a special agent?+
Any TRREB-registered agent can write a Power of Sale offer, but experience with the Schedule B and lender-side closings matters. Ask the agent how many POS deals they have closed.
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Work With a Top Toronto Real Estate Agent
Power of Sale buying takes specialized experience. Aldo and his team have closed Power of Sale transactions across the GTA — including the Schedule B negotiation that protects you on closing day.