Can you guess why I chose the feature image for today’s blog post?  I’ll admit, I went through a lot of different ideas before I landed on this one.

I thought about using a photo with literal meaning, such as a picture of a bank, or maybe some stock photo of a large contract.  But then I decided to look for something more metaphoric, since the idea of buying a property from a bank is something that people might think about, but never actually do.

The “bank sale” exists out there, but nobody really ever comes across it.  They hear about it, they read about it, and some might fantasize about “stealing from the bank,” but it’s never going to be literal.

Buying from a bank is not easy.  Far from it, in fact.  And while you might think that since a bank isn’t in the business of owning houses and condos, and thus would be highly motivated to sell any foreclosed property as soon as possible, the process of buying from a bank would be easy.

How easy?

Like taking a product off the shelf and placing it into your shopping cart.

Maybe it should be.  As I said, banks don’t want to own real estate.  They do everything they can to avoid it, which is why we see them renegotiating terms with distressed borrowers all the time.  So when it comes time to actually sell a property under power of sale, you might be shocked to learn just how hard they make it.

Earlier this spring, a blog reader from Vancouver reached out and said that his son would be attending the University of Toronto in the fall of 2026, and he wanted to purchase a small, one-bedroom condo downtown for his son.

My client, who we’ll call “Eric,” emailed properties back and forth for a couple of weeks, and we discussed the pros and cons of different neighbourhoods, buildings, and condo sizes and styles.

Eventually, Eric and his son flew to Toronto, and we looked at a slew of different units over the course of three days.

When all was said and done, there was no “short list” to speak of, but rather there was one condo that they both agreed they wanted to purchase.

As luck would have it (and I suppose I mean that literally, because it gave us the story for today’s blog post…), the condo that they really wanted was being sold under power of sale by the bank.

We’ll call it “Bank of Toronto” just for anonymity’s sake.

I called the agent, who we’ll call “Ron,” to feel him out on a number of things, but mainly the process and the price.

The property was listed for $589,900 and had been on the market for 126 days with no price reduction.

Ron immediately told me, “The price is highly negotiable.”

It was an odd thing to say, not only in the context of an initial discussion, but also because it was basically the first words out of his mouth.

“We’re not allowed to reduce the price,” Ron told me.  “So we have to keep it at $589,900 for as long as it takes, and it’s my job to try to get a deal done at a lower price.”

That made sense.  Sort of.

I mean, it’s not logical, practical, or helpful in any way, but since the property was being sold by the bank, you would almost expect the process to be unnecessarily complicated.

Ron told me that the property was tenanted, which wasn’t disclosed on the listing.

“We can give them notice,” he said.  “It’s no problem.  They know the property is being sold and they’re already looking for a place.”

Ron said, “I do bank sales all the time; it’s easy, we just need to work together to get something done.”

Famous last words…

Eric decided that he wanted to move forward, so we put together an offer for $510,000, which might seem low, based on the list price of $589,900, but even the listing agent admitted that the price was way too high.

We included a clause that the seller was to give notice to the tenant as follows:

The Buyer hereby authorizes and directs the Seller, and the Seller agrees, when this Agreement becomes unconditional, to give the tenant(s) the requisite notices under the existing Residential Tenancies Act (RTA), requiring vacant possession of the property effective August 31st, 2026.  The Seller further agrees to provide to the Buyer copies of the requisite notices sent to, received by, and acknowledged by the tenant in this regard.  In the event that the Tenant fails to vacate the property on or before August 31st, 2026, the Buyer shall have the option, in the Buyer’s sole and absolute discretion, to terminate the transaction, and the deposit shall be returned to the Buyer in full forthwith, without deduction, along with any accrued interest.

This is a standard clause that we use for tenanted properties where our buyer-client intends to owner-occupy the property upon closing, and it also includes a provision that we can terminate the Agreement if the tenant doesn’t leave, which unfortunately happens in Toronto.

Two days later (and one day after our offer expired…) we received a sign-back from the bank.

It was wild.

The price was $570,000, which didn’t really seem like they knew they were overpriced and wanted to sell, but the price is the least important part of this.

The offer was marked up like nothing I had ever seen before.

Almost half of the pre-printed, boilerplate clauses from the standard Agreement of Purchase & Sale were crossed out, which I expected, to be fair.  This property was being sold under power of sale with “no representations or warranties,” and this is what banks do.

However, there were several things that I did not expect:

1. All of the “chattels included” were crossed out.
2. The maintenance fees were crossed out.
3. The parking and locker were crossed out.
4. Our ‘notice to tenant’ clause was crossed out.
5. HST was changed from “included in” to “in addition to.”

Again, I understand that bank sales are complicated and I understand that the property was being sold “with no representations or warranties,” but the explanation that followed was interesting.

Ron said, “Don’t worry, the appliances will stay in the unit.  We just can’t warranty that they will.”

I asked him what this meant, and he said, “We can’t include them in the Agreement.  But anything that’s in there now will stay for closing.”

This is where some of you might tap out, and I wouldn’t blame you.  Because essentially what we were being told was that we just had to trust that the fridge, stove, microwave, dishwasher, washer, and dryer that were in the unit, being used by the tenants, would remain there upon closing.

He said, “We can’t represent the maintenance fees, so we had to cross them out.  We have to leave that section blank.”

This was fine with me, since our offer was conditional on a lawyer’s satisfactory review of the condominium’s status certificate, and we would confirm the fees regardless.

But as for the parking and locker, I had a serious issue here.

Ron told me, “The parking and locker come with the unit, but we just can’t provide a representation.”

I asked him what the hell that meant, and he said, “We can’t represent it.”

I don’t like using the word in the definition of the word, and that’s exactly what Ron had done.  Rather than asking him to elaborate, I simply said, “We’re buying the legal condo unit, we’re buying the legal parking unit, and we’re buying the legal locker unit.  All three need to be in the purchase agreement to be conveyed.”

Ron said, “Yes, they will be conveyed upon closing.  They just can’t be included in the Agreement since that would be a representation on our part.”

It was a ridiculous statement.

By this logic, he could make the same statement for the legal unit itself.  He could say, “The legal unit can’t be described in the Agreement, since we can’t represent anything,” but he wasn’t.

Because he was listing the legal unit in the Agreement (ie. Level 28, Unit 7), but not the legal parking (ie. Level C, Unit 234).

When it came to crossing out the clause about giving notice to the tenant, he said, “Of course we’ll give notice on your behalf!  We just can’t represent it.”

It was starting to sound repetitive.

Last, but not least, stating that HST was “in addition to” was because, as Ron put it, “We have no idea how the defaulting borrower was using the condo, so we can’t represent that HST isn’t included.”

HST would not be included, of course.  This was a resale condo.  But as Ron stated over and over, the bank would not make any representations whatsoever, and much of their sign-back was upside down and backwards as a result.

There were a couple of other small changes to the offer.

They crossed out “three” buyer visits before closing and changed it to “two.”  This felt quite petty.  It felt like a change for the sake of change, and it gave me the feeling that whoever was on the other side of this deal was just getting his or her jollys.  More on that later.

They also changed “ten” business days for financing to “five,” which was a non-starter for us, since any lender looking to approve the purchase of a property from a bank would insist on a much longer conditional period.

Again, this seemed like a change for the sake of change, since our condition on the lawyer’s review of the status certificate was ten business days, and thus changing the conditional period for financing wouldn’t speed up the deal.

I spoke to Eric at great length, and he said, “This ain’t my first rodeo.”

He owned multiple properties out on the West Coast, and he said that he had purchased a bank-owned property out of power of sale before.

We signed the offer back to the seller with the following changes:

1. $520,000 purchase price.
2. Change financing review back to ten business days.
3. Re-insert legal description of parking and locker.

I was really stuck on this parking and locker situation, and I’ll tell you why.

In 2021, I sold a portfolio of condos down on Abell Street and Lisgar Street.

I had about 20 condos, 15 parking spaces, and 15 lockers, all owned by the same individual, and I was told, “Sell them all, I don’t care how.”

I essentially ran a sales centre out of there all summer, and I could package a condo with a parking space or without, and I could sell a locker, or not.  It was up to me, depending on what the buyer wanted.

But problems eventually arose because buyer agents would look up a condo unit on Land Registry and say, “This condo comes with a parking space.”

I would reply, “No, it doesn’t.  The PIN for the parking unit is linked to the condo unit in Land Registry, but we’re not selling the parking unit with the condo.”

Most buyer agents failed to understand what I was telling them.

So I might offer, “I’m holding an apple and a banana in my hand.  But I’m only selling you the banana.  Just because I’m holding both pieces of fruit in the same hand doesn’t mean that you get both if you buy one.”

I ran into problems with this all summer long, and one agent even tried to pull a “gotcha” when he told me that the Agreement of Purchase & Sale only noted the condo unit, but since Land Registry linked a parking unit and a locker unit to the condo, that his client was expecting all three to be conveyed.

Uh huh.

Except we only sold him the condominium unit.  Not the parking or locker, as neither was in the Agreement.

Having gone through this experience five years earlier, I was now concerned that if the bank were to cross out the legal description of the parking and locker in the Agreement, then they wouldn’t be legally obligated to convey them upon closing.

I spoke to Eric’s lawyer, and he said, “It’s kind of a grey area,” which is the classic legal response.  Our in-house legal counsel gave me the same answer, so ultimately I wasn’t in a position to argue.

When we received the sign-back from the bank, they had changed the price to $530,000, the financing review back to five business days, and they had crossed out the parking and locker again!

This was a hill I was willing to die on.

I told Ron, “I’ll accept that the appliances aren’t ‘included’ in the Agreement but will be left there upon closing, but I can’t sell my client a condo with parking and locker unless the parking and locker are actually included in the Agreement.”

We signed the offer back at $520,000, with ten business days for financing, and with the parking and locker included.

Yes, this was the exact same offer that we had sent over before their last sign-back.

This time, however, their sign-back was interesting.

They crossed out the parking and locker on the first page, as they had done before, but they wrote the legal description into Schedule A.

So much for their whole “We can’t represent anything.”

It felt like they were making an exception here, which opens the door to more down the line.

Also interesting about the sign-back was that Ron simply forwarded me an email from somebody else, which included all their correspondence.

Somebody named “Jimmy” had been discussing the offer with Ron, and from what I could tell, had been doing the negotiating all along.

In the email that Ron forwarded to me, Jimmy had said to Ron:

I accept the $520,000 purchase price, but I do not accept the ten business days for financing.  This needs to be five.

Who the hell was Jimmy?

Jimmy was acting like this was his condo, from the way he said “I this” and “I that.”

But the amazing thing was, the ten business days for financing weren’t crossed out!  While Jimmy said, “This needs to be five days,” they hadn’t changed it.  They had signed it, though!

Oops!

Sorry, Jimmy.  Sorry, Ron!  Check your paperwork next time, gents.

They sent us a sign-back at $520,000, with ten business days for financing, and with the locker and parking written into Schedule A.

The sign-back was in a PDF, and the file was named “SCANNER001.pdf,” which was just strange, but not as strange as the fact that Ron was simply forwarding an email from somebody named “Jimmy” who had a Gmail account.

Jimmy’s email signature said:

Jimmy Jones
Legal Coordinator
XYZ Legal Firm Canada

So…..Jimmy was a lawyer?

It would seem that way!

XYZ Legal Firm Canada was the law firm that the bank was working with, and I was really curious to know more about Jimmy, since it seemed now that Ron was simply listing the property for sale on MLS, but he wasn’t actually doing any negotiating on behalf of the bank.

But when I looked up Jimmy online, I found no trace of him.

I found a real estate agent with the same name, but no lawyer.

I went to the Law Society of Ontario’s website and typed Jimmy’s name into the search, but there were no results.

Jimmy wasn’t a lawyer.

Who the hell was Jimmy?

We knew that Jimmy had signing authority on behalf of the bank, and we knew that Jimmy was really the one calling the shots behind the scenes.

I called Ron, and I said, “Ron, who is Jimmy Jones?”

There was a very long pause.

I asked, “Ron?”

He said, “Um, well, he’s the lawyer for the seller.”

I said, “Ron, Jimmy isn’t a lawyer.  I looked him up on the Law Society’s website, and he’s not listed.”

Ron said, “David, I’m not good with technology.  I don’t know how to save a file, and I usually get help with it.  And, oh, man, I shouldn’t have forwarded you that email with the offer attached; I just really wanted to get this to you as quickly as possible.”

I said, “Ron, you need to tell me who Jimmy is, because this is starting to feel suspicious.”

Ron said, “David, can I call you back?”

That sounded suspicious.

I went back to my email and looked up the correspondence between Ron and Jimmy, and I decided to plug Jimmy’s cell phone number into Google and see if anything came up.

Something did.

I found a web page for a real estate agent named Jimmy Jones, with the same phone number that was in the email signature for Jimmy.

Huh.

Jimmy wasn’t a lawyer.

Jimmy was a licensed real estate agent working out of an office in Niagara Falls, who, for some unknown reason, was representing himself as a lawyer working with XYZ Legal Firm Canada.

Ron called me back, and I immediately said, “Ron, it would seem that your ‘lawyer’ working on the other end of this deal isn’t actually a lawyer, but rather a real estate agent in Niagara Falls.”

There was silence.

I said, “Ron, I need to know the nature of your relationship with Jimmy.”

Ron said, “That’s confidential.”

I said, “Ron, explain this to me, or my next call is to your Broker of Record, and then to Jimmy’s.”

Ron came clean.

He said, “Jimmy is an agent, and I work with him on all my bank sales.  He’s been hired by XYZ Legal Firm Canada.  He has signing authority.  I don’t know why his email signature implied that he’s a lawyer.  He’s not.  He’s just working on the file, that’s all.  It’s totally innocent.”

I started to process this, but I wasn’t given much time.

Ron interrupted my thought flow and said, “David, there’s one more thing you need to know, and I should have mentioned this earlier.”

The sound of Ron’s voice worried me, but nothing could prepare me for what he said next.

“David, the seller of this condo is deceased…”

(TO BE CONTINUED)