If you’ve been doing some online house hunting, chances are you’ve seen a few foreclosure terms that you may not have been aware of. Homeowners fall into potential foreclosure situations for a variety of reasons. There are also a few stages they go through before ultimately reaching foreclosure. Here we’ll break down the different types of foreclosures and how they impact you, the buyer.
There are several types of properties that are generally known as “foreclosures.”
- “Pre-foreclosure” is a home that is in danger of falling into foreclosure, but is still owned by the homeowner. If the home is in pre-foreclosure, the homeowner wants to sell as quickly as possible to avoid going into foreclosure. The fact that these owners are typically in a hurry to sell gives buyers a bit of an advantage.
- “Foreclosure” is a property that will be sold or repossessed by a creditor or a lender to recover the amount owed on it.
- While pre-foreclosures are available for purchase from a homeowner, foreclosures can be bought at auction or as bank-owned properties (also known as REO or real-estate owned properties) from a lender. This can be a great option for buyers as banks are sometimes willing to offer foreclosures at a discount, since the longer they hold these properties the more it costs them.
One of the best things about foreclosure properties is that they’re available in a variety of price points and conditions. From starter homes to luxury homes, some foreclosure properties require only minor repairs or upgrades.
If you’re ready to start checking out foreclosure properties in the Denver area, contact Metrowest. We specialize in this type of sale and would love to help you start the process!