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    Unlocking Bargains: A Guide to Buying Foreclosures

    These properties can offer significant savings for buyers willing to put in the extra work

    Written By Robert Van Rhijn

    If you’re in the market for a new home in the Greater Toronto Area, foreclosed properties could be an option worth exploring. While these homes often come with unique challenges, they can also offer significant savings for buyers willing to put in the extra work.

    So let’s take a closer look at what foreclosure properties are, how the buying process works, and what you need to consider before making a purchase.

    What are Foreclosure Properties?

    Foreclosure properties or power of sale properties are homes that have been repossessed by a lender, due to the previous owner’s inability to keep up with mortgage payments.

    When a homeowner defaults on their mortgage, the lender can take legal action to reclaim the property and sell it. This would allow them to recoup the outstanding loan balance. Or in the case of a power of sale, the homeowner initiates the process to sell their home to recover the outstanding mortgage debt.

    These properties are often listed at a discounted price, to attract buyers quickly.

    The Buying Process

    1. Research and Identify Properties: Start by examining available foreclosure properties in the GTA. You can find such listings through

    Here are a couple that are up for sale right now:


    508 - 2055 Danforth Ave.

    This two-bedroom, one-bathroom corner unit in Carmelina Condos is listed for $649,000. For comparison, the average price is usually $787,500. Although it’s pretty typical, there is lots of light and plenty of storage. It also comes with a parking spot.


    304 - 3390 Weston Rd.

    This three-bedroom, two-bathroom apartment is listed for only $499,000, reduced from $549,000. While the condo is dated and needs a refresh, units in this building go for an average of $505,000, and increase 10% in value year-over-year.

    2. Get Pre-Approved for a Mortgage: Just like buying any house in the GTA, it’s important to get all your ducks in a row. One of those ducks is getting pre-approved for a mortgage. This shows sellers you’re a serious buyer and have the financial backing to complete the purchase.

    3. Inspect the Property: Unlike traditional home purchases, foreclosed properties are typically sold “as-is,” meaning the seller will not make any repairs. It’s crucial to conduct a thorough inspection to understand the condition of the property and any potential repair costs.

    Like with 49 Ivordale Cres, which is up for $999,900, even the listing says “it requires significant work” and “diamond in the rough”. Which in realtor speak means, it’s a hot mess. Or in cases like 42 Agar Cres, which got part way through a rebuild or renovation, it’s important to take into account the quality of the construction, as well as what else needs to be done.

    4. Make an Offer: If you decide to move forward, submit a competitive offer. Be prepared for the possibility of multiple bids, as foreclosure properties can attract a lot of interest.

    5. Secure Financing: Once your offer is accepted, you’ll need to finalize your mortgage. Be aware that some lenders may have stricter requirements for financing foreclosed properties.

    6. Close the Deal: After securing financing, you’ll move forward with the closing process, which includes signing paperwork and transferring funds. Once everything is finalized, the property is yours.

    Key Considerations

    1. Property Condition: As we mentioned, foreclosed homes are often in varying states of disrepair. Budget for potential renovations and be prepared for unexpected issues that may arise.

    2. Hidden Costs: Beyond the purchase price, consider additional costs such as back taxes, liens, and fees. These can add up quickly and affect your budget.


    3. Market Value: Research the market value of similar properties in the area to ensure you’re getting a good deal. Sometimes, the discounted price of a foreclosure isn’t as much of a bargain as it seems when factoring in repair costs.

    For example, 405 Oakwood Ave. is listed for $799,900. This house hasn’t been updated since the 50s or 60s and needs a ton of work – likely more than $500,000 worth.

    4. Legal Issues: Ensure there are no legal complications with the property. This includes verifying that the foreclosure process was conducted legally, and that there are no outstanding legal claims against the property.

    5. Financing Challenges: Some lenders are hesitant to finance foreclosed properties due to their condition. It’s important to work with a lender experienced in these types of transactions to avoid any financing hurdles.

    Starting your search for a new home? Click on any of these links to access active listings, sold listings or contact a Strata agent.

    For any questions about this article or media inquires, please email