A foreclosure takes place when a home is seized and put up for sale by the lender. When you see a home listed as foreclosed, it means that it's owned by the lender. Every mortgage contract has a lien on your property. ... Foreclosures are typically the result of the homeowner being unable to keep up with their mortgage.

Is it good to buy foreclosure house?

The main benefit of purchasing a foreclosed home is savings. Depending on market conditions, you can purchase a foreclosed home for considerably less than you'd pay for comparable, non-foreclosed homes. ... Foreclosed homes are sold in "as-is" condition, and are typically unavailable for a walk-through before purchase.

Why are foreclosures so cheap?

Banks try to sell foreclosed homes as fast as possible. Thus, they put them on the real estate market for sale below market value! Another reason why foreclosed homes are cheap investment properties is that they are usually in a distressed situation, which lowers their market value in the real estate market.