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Advantages: Bank is motivated to get property sold and will negotiate price, down payment, closing costs, escrow length, etc. Title will be clear; buyer will not take on any liens, mortgage or back taxes of prior owners. Property will usually be listed on MLS; bank will pay real estate agent's commission.

You have already received info about what notice of default and bank owned means and why the "prices" are so low. As far as the process of buying a foreclosed property is concerned. There are essentially 3 ways. The foreclosure process ends with what's called a trustee sale which is conducted at the court house steps.

Get a broker on your side. The goal of combing through foreclosure listings is not to find a house; it's to find an agent. Banks usually hire one or a few real estate brokers to handle their REO properties in a market. In a lot of cases, the buyer works directly with the bank's broker instead of using a buyer's agent.

If the home doesn't sell, the lender will hold on to the property, which is known as real estate-owned, or REO. Throughout most of the foreclosure process, until five days before the auction date, you are in a reinstatement period. You can make all your past payments in full along with penalties and keep your home.

When you purchase a home and a homeowners insurance policy, you should create an up-to-date home inventory to expedite a claim settlement if you ever need to make one. With a complete home inventory, your insurance company can verify property easier, which makes settling your claim easier. Plus, you can easily verify losses for your income tax retu

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower, who has stopped making payments to the lender, by forcing the sale of the asset used as the collateral for the loan.