There are a lot of differences between a foreclosure and a non-foreclosure home. When a person buys a foreclosed property, the closing process can take longer than a non-foreclosed home. This is due to the amount of paper work involved with releasing the property from the bank or lender. Foreclosed properties are also more competitive in the market because there could be many than just one or two offers. A foreclosed home is a home that has been repossessed by a bank or a lender. It then becomes the property of the bank, until resold to another buyer at what is usually a lower price.
There could be a significant difference in the price of a bank owned home, as opposed to a non-foreclosed home. Often times this is due to the condition of the property. In some areas there are more foreclosures being sold than non-REO homes. Even though it is a buyer's market right now, non-foreclosed homes and bank owned homes are affected differently because they are in separate markets.
Non-foreclosures are regular properties that are being sold by owners who want to use the money to buy a bigger home, or to move into a smaller place. These properties are not behind in payments, or in default. This puts these types of homes in a separate market than foreclosed homes. Sellers who are selling non-bank owned homes may be more negotiable on the price, due to the buyer's market. Part of what has caused the buyer's market is the increased number of bank owned homes in comparison to non-foreclosed homes. Most non-bank owned homes are selling at higher prices compared to foreclosed homes because of the poor condition that most foreclosure homes are in. There is a dip in prices for foreclosed homes when compared with non-foreclosure homes. One of the things needed for the real estate market to begin to stabilize is a return of a more natural balance when comparing bank owned homes to non-foreclosures.
Sellers who are selling a non-foreclosed property should look at the area where they are selling their home to find out if there are a lot of foreclosures in their area because this could negatively affect them when trying to sell their home in a quick manner. Most people are buying REO homes because they are much cheaper. Even though both markets are separate from each other, they can still affect each other in a buyer's market. Most distressed homes are already in foreclosure. There are not as many home owners who are starting the foreclosure process. Most of them have already walked away from their properties. In a few years, the number of bank owned property will return to a more natural balance and the non-foreclosed homes will take dominance once again.