| Due to the continuing economic depression, more and | | | | regain their losses. |
| more people are losing their homes. The major reason | | | | 4. When it comes to the eviction process, in a |
| for this is mortgage payments delinquency. | | | | foreclosure, the sheriff performs the eviction while in a |
| Homeowners who have suddenly found themselves | | | | real estate owned property sale, the bank initiates the |
| out of work or undergoing some financial difficulties are | | | | eviction which involves an eviction coordinator. |
| the ones who are experiencing this crisis. This leads to | | | | 5. Buyers of a foreclosed property may have several |
| their properties being subjected to a foreclosure and | | | | competitions in bidding. The property's deed is given to |
| later on, to a Real Estate Owned Sale. You might ask, | | | | the bidder with the highest bid price. Homebuyers in an |
| what is the difference between a foreclosure and | | | | REO may negotiate the price with the bank or the |
| Real Estate Owned (REO) sale? | | | | mortgage lender. They are also assured that the home |
| Here are the differences between a Foreclosure and | | | | is free of all lines. Plus, buyers can freely move-in |
| an REO: | | | | anytime after sale is made since the home will be |
| 1. A foreclosure is a home that is not yet owned by | | | | vacant by the time of the sale. |
| the bank. Most homeowners attempt to sell their | | | | The cost of the property for both sales are fairly low |
| homes through a short sale, selling less than owed and | | | | than in a normal buying process. An REO may have a |
| seeking forgiveness of unpaid debt from the bank, | | | | smoother buying process compared to that of a |
| while in an REO, the bank already owns the property | | | | foreclosure. |
| and is motivated to sell it as soon as possible. | | | | If you are wishing to buy a home, it is vital to |
| 2. Homes sold through foreclosure are those that are | | | | remember that the main thing that differentiates an |
| owned by delinquent homeowners. The holder of the | | | | foreclosure from an REO, is the responsibility for you |
| liens of the home has required the assistance of the | | | | as a potential homeowner. Buying real estate owned |
| court to repossess the home in order to terminate the | | | | properties you are assured that the property is clear |
| borrower's right to redeem. An REO is a home or | | | | and free. When a home goes back to the bank or the |
| property repossessed by the bank or a lender after | | | | lender after it remained unsold in an auction, the lender |
| an unsuccessful auction. These properties could be | | | | or the bank will have to shoulder all the debts, tax liens |
| free from liens upon successful negotiations with the | | | | and other fees and payments connected with the said |
| bank and other lien holders. | | | | property. The best possible way for the bank is to sell |
| 3. Foreclosed home sale is done through bidding in | | | | it at foreclosure since in a foreclosure, the buyer gets |
| auction. The officer of the court or the sheriff initiates | | | | the property as it is, without renovations needed and |
| the process of bidding. The price initially starts to an | | | | takes on the responsibility of all unpaid dues and taxes |
| amount equal to the borrower's outstanding loan but | | | | on the property. |
| does not exceed the property's market value. Real | | | | A foreclosure property may have several risks |
| estate owned properties are directly sold by the bank. | | | | involved. It is better to leave it to professional real |
| They are expensive compared to a foreclosure since | | | | estaet investors who know a great deal about |
| lenders are willing to take all opportunity for them to | | | | foreclosure homes and the process involved. |