10 Difference Between Auction And Foreclosure

1. Auction is a process of buying and selling goods or servicesthrough bidding where the item is sold to the highest bidder 2. Foreclosure is the procedure of a lender taking possession of a mortgaged property of a borrower in case he or she fails to make loan payments. 3. A property auction can occur for a number of different reasons. Foreclosure is one of those reasons. Others include homes taken by the government when the owner fails to pay his taxes, when the owner dies and the estate is sold, or when the owner decided to willingly place the property in a public auction in the hopes of quickly finding a buyer who will pay a good price for the property. 4. Foreclosures have serious drawbacks for all of the parties involved. A foreclosure does serious damage to the credit score of the buyer who loses the home. The bank ends up with a piece of property that might not be resold for quite some time and might not bring in enough money to cover the outstanding balance of the loan.  5. Auctions are sometimes a great way to find a bargain but keep in mind, auctions are designed to create high levels of interest in a concentrated period of time. The idea is to create a bidding war.  6. In both auction and foreclosure, the good/service or the property will be sold at the highest bid price. 7. Repayment of a debt is not involved in an auction. Foreclosure will occur due to not meeting obliged debt repayments. 8. Auctions take place to transfer the ownership goods and services in a wide range. Foreclosure is mainly attributable to the property. 9. Foreclosure properties are a good choice for investors, particularly if they are purchased through an auction. 10. You'll have to be prepared with cash on hand and a budget for the property you want when attending the auction.