The foreclosure process begins when a borrower/owner defaults on loan payments and the lender files a public default notice, called a Notice of Default or Lis Pendens.
Show moreBuying a property in pre-foreclosure involves approaching the borrower/owner and offering to buy the property outright.
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Auction
(Notice of Trustee Sale or Notice of Foreclosure Sale)
If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction.
Show moreBuyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction often offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner.
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Bank-owned
(Real Estate Owned)
If the lender takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender will usually want to re-sell
Show more the property to recover the unpaid loan amount. The lender will then typically clear the title and perform needed maintenance and repair; however, the potential bargain for these REO homes is typically less than a pre-foreclosure or auction property.
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