By Rebecca Alwine, Army Spouse

You found a house at your new duty station, its perfect! Then you learn it is one of the stages of foreclosure. Should you continue pursuing it? Maybe cut and run? Is buying a foreclosed house really worth the hassle? There are several types of foreclosures, each with their own sets of advantages and disadvantages.


When the owners are more than 90 days late on payments and the lender has started the foreclosure process. The owner may not be ready to sell, so patience on this purchase is key. There is still time for the owner to pay up and keep the house.


  • Seller is usually motivated for a quick sale, which may increase the buyer’s negotiating power
  • Buyer can do all the standard inspections during the contingency period


  • Lender may not approve the price or closing cost credits
  • Sellers still have to move out
  • Short sale may take 45-90 days to close

Auction Property

After a property owner is notified of their house going into pre-foreclosure, and they do not make the back payments, the lender will frequently sell it in an auction.


  • The property can be sold for a low price because the lender sells for the outstanding mortgage balance owed
  • Cash payment requirements drastically reduce competition


  • No mortgage allowed
  • Inspections not allowed
  • Buyer may owe back taxes and mortgages
  • Bank cannot provide information as to property history
  • Bank may purchase the property themselves

Nicole Perez and Megan Laycock both have considered purchasing a foreclosed home. They were outbid multiple times throughout the years. Cianna McEver was successful in purchasing two foreclosed homes, one of which went to auction. She highly recommends a knowledgeable REALTOR®. “Our REALTOR® explained everything, did plenty of research and was very accommodating,” she said. McEver admits the process was a bit stressful, “It was fun when we went to auction, but there was definitely high tension.”


Real Estate Owned, or REO, is often what industry professionals call a foreclosure property that is repossessed by banks or lenders. When a bank or lender buys it at auction or no one bids at auction, it reverts to the lender, who will want to sell.


  • Bank is motivated to sell and will negotiate almost all terms
  • Title will be clear
  • Inspections are allowed within normal contingency period
  • House is vacant


  • Sale is as-is, bank will not agree to any repairs
  • Bank cannot provide information on property history
  • Bank will usually require extra paperwork

Military spouse Heidi Moore encourages some research into incentive programs. PCSgrades offers 20% cash back on all REALTOR® sales commissions (in states where allowed by law) and discounts on closing costs from select Mortgage Lenders.

As with all home purchases, a trusted REALTOR® is important. Carefully read reviews left by fellow military and veteran families on local REALTORS to find one to help you through the home-buying process.

AuthorRebecca Alwine is a PCSgrades’ Blogger Affiliate and a freelance writer, army wife, and mother of three. Over the past 10 years, she’s discovered she enjoys coffee, running, lifting weights, and most of the menial tasks of motherhood. When she’s not writing, she can usually be found hiding behind the sewing machine or with her nose in a book. Her writing experience includes military family topics, research pieces, guest blogging, and much more. She’s a contributing writer for ARMY Magazine, a regular contributor for several publications including to Homefront United Network, PCSGrades, ESME, and has also been published in Ms. Magazine and The Atlantic. You can follow her online at or on Twitter (@rebecca_alwine) and Instagram (@rebecca_alwine).