08/27/2026
Understand the Type of Foreclosure Sale Prior to Buying a Foreclosed Home
Typically, the lenders can initiate foreclosures in two ways depending on the jurisdiction to which the property belongs.
Judicial Sale – This foreclosure process is done under the supervision of the court. The Banker or the lender has to get the court’s permission to gain the legal rights to sell the property. If the property you are looking to buy is situated in Alberta, Nova Scotia, British Columbia, Quebec or Saskatchewan, then the foreclosure process should be done in the Judicial sale approach. It is a time-consuming process as the court gives sufficient time for the borrower to come up with a payment plan.
The court gives the borrower about 20 days to file a defense petition and avoid foreclosure. When the borrower fails to respond to the summons or file a statement of claim or if he/she loses the case, the banker will be granted the permission to put up the house for sale. On the other hand, if the borrower responds and seeks to defend himself, the case can go on for a longer period.
Power of Sale – This is a faster process followed by Ontario, New Brunswick, Prince Edward Island, and Newfoundland. The power of sale clause is included in the mortgage contract, giving the lender the right to repossess the house if the borrower fails to pay up to a maximum of four installments.
In this arrangement, the lender can bypass the requirement of having the court’s permission to acquire the right to sell the property. Even in this scenario, the banker serves a notice asking the borrower to make the defaulted mortgage payments. The lender may allow about 35 days as a redemption period for the homeowner to pay up the dues, including the arrears, late fee, tax, and penalties.
In case the borrower does not pay up the arrears within the time given in the notice, the lender will send an eviction notice asking the homeowner to vacate the property within 30 days. Once the homeowner has vacated the premises, the house is put up for an auction or a traditional sale. Facing a foreclosure is not always desired by both parties; the bankers most often give them enough time to settle the payments.