MLS vs Auction

[Kevin Siedlecki]

My current residence was a foreclosure listed on MLS. The offer and closing process was no different from any other transaction, and I got it for only about 10% under market value. Now I am looking at auctions, and I realized that I do not know the answer to this seemingly basic question: how does a property get to auction as opposed to being listed?

[Christopher Malone]

Hello @Kevin Siedlecki 

A property goes to auction when it is first foreclosed on by the bank. The starting bid is normally the remaining balance of the mortgage. If the property does not sale at auction, ownership goes back to the bank, this is known as Real Estate Owned (REO). At this point, the bank list the property with an agent and the property is listed as a REO foreclosure.

I hope this answers your question,

Chris