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For them and anyone else looking for a potential bargain, a foreclosed home could be the solution.
Foreclosures are homes that have been repossessed by lenders because the homeowners defaulted on their mortgage loans.
Why Buy a Foreclosed Home?
So theyre sometimes willing to accept less than full market value to sell foreclosed homes quickly.
How much less theyre willing to accept depends on the market.
That drove down prices on foreclosures and on home values in general.
Buying a Home in 2025
In 2025, demand for homes exceeds supply.
Prices are high and bargains are fewer and farther between.
Demand isnt the only factor guiding price.
Foreclosure pricing often reflects those challenges.
There are three types:
1.
Judicial Foreclosure
The lender sues the borrower in court for the back payments.
The lender sues the borrower in court and then takes possession if the borrower doesnt pay by the deadline.
The property is then a bank-owned, or real estate-owned, property.
Types of Foreclosures
Each phase of foreclosure presents opportunities to buy a home at a discount.
Auction
If the home doesnt sell pre-foreclosure, it goes to auction.
Auction sales are especially risky because you have to buy the homes sight unseen.
Those are issues you tackle after your offer has been accepted and you begin working toward closing.
Steps To Buy a Foreclosed Home
1.
Local tax and building permit records might provide additional useful information.
For an REO foreclosure, you prepare an offer and your agent submits it on your behalf.
They include applying for your mortgage loan, ordering the title search and purchasing title insurance.
Financing the purchase lets you buy more house than you could afford if you had to pay cash.
The biggest challenge, though, often comes from other buyers looking for a bargain.
Conclusion
For homebuyers looking for discounted properties, foreclosures can be a good choice.
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