A bank-owned foreclosure is a home that has gone into foreclosure because the previous owner has not kept current on the required payments. The bank or lending institution then takes ownership of the property as collateral on the loan that went into default. Banks, as a general rule, are not in the business of owning property or real estate, so they do as much as they possibly can to make sure that these homes are sold quickly as they are lose money by keeping the property in their inventory. As a result, these foreclosures are usually sold at a decreased price and are usually below market value.
Foreclosure homes can usually be purchased 5% to as much as 50% below market value!
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