As higher interest rates, rising living costs, and tighter credit squeeze borrowers, “power of sale” listings are quietly multiplying across the GTA.
Once rare, these distressed listings — where lenders take possession and sell properties after borrowers default — are now surfacing in prime downtown neighbourhoods. According to TRREB data analyzed by Valery Real Estate, downtown Toronto has already seen 49 power-of-sale listings in 2025, more than four times last year’s total.
For investors and buyers with cash in hand, the question is simple: are these a rare opportunity — or a financial minefield?
What is a Power of Sale?
Unlike a foreclosure, where ownership transfers to the lender, a power of sale allows a lender to list and sell a property to recover missed mortgage payments while title still technically belongs to the homeowner.
It’s a faster process, but it comes with legal protections — lenders must sell at fair market value or risk being sued by the borrower for losses.
That means you won’t find “fire-sale” pricing — but strategic buyers can still find value, especially when sellers are under time pressure to recover funds.
Can You Actually Get a Deal?
Here’s what the numbers show:
Since early 2022, 43 downtown Toronto properties have sold under power of sale.
- 80% sold below asking price,
- with average discounts around 5% from list price.
That might not sound massive — but on a $1M condo, that’s a $50,000 difference.
For disciplined investors and cash buyers, that margin can represent a built-in equity buffer from day one.
Compare that to the average downtown sale price, which hovers around 1% below list — and the edge becomes clear.
Where Are These Listings Showing Up?
Power of sale properties aren’t confined to fixer-uppers in the suburbs. Recent examples include:
- A one-plus-one condo in Little Portugal listed around $465,000
- A two-plus-den unit in the Financial District at $1.57 million
- A seven-unit mixed-use property in Kensington Market near $5 million
Since 2022, the average sale price of power-of-sale listings downtown sits near $1.1 million, spanning everything from small studios to income-producing retail units.
How to Find Power of Sale Listings
Finding them takes more than browsing Realtor.ca. Only about one-third of power-of-sale listings are publicly tagged as such.
To uncover the rest, buyers typically work with experienced real estate agents who can search MLS back-end data or connect directly with lenders aware of upcoming distressed sales.
At Lendworth, we often review these listings as part of our investment due-diligence process — analyzing valuation spreads, title encumbrances, and potential legal risks before capital deployment.
The Catch: Know the Risks
Not all distressed listings are diamonds in the rough.
Lawyers warn that power-of-sale homes are sold “as-is”, meaning no guarantees, no repairs, and no compensation if defects surface after closing.
Buyers could inherit issues like:
- Structural damage or foundation cracks
- Unpaid utility or property tax bills
- Tenancy disputes or liens
And perhaps the biggest risk — the original owner can still redeem the property by paying off their debt up to the closing date, cancelling your deal at the last minute.
That’s why these opportunities are often better suited for experienced investors with flexible timelines and a high risk tolerance — not first-time buyers banking on move-in dates.
Bottom Line: Opportunity with Caution
The rise in Toronto’s power-of-sale listings reflects broader economic stress — but also creates selective opportunity for investors ready to move quickly and analyze risk intelligently.
At Lendworth, we monitor these trends closely as part of our lending and investment strategy.
Where others see distress, we see data-driven opportunity — deploying capital into secured, asset-backed mortgages with conservative loan-to-value ratios and strong collateral.
Key Takeaway for Buyers and Investors
Power-of-sale listings can offer modest discounts and fast deals — but they’re not for everyone.
If you’re exploring distressed opportunities or alternative mortgage solutions, Lendworth helps you leverage your equity safely and strategically.
📞 Call Lendworth Financial at (905) 597-1225