What’s the difference between these two terms?

In Foreclosure

In foreclosure means that the house is in the process of being foreclosed. This is the time period where the seller has been notified of the start of the foreclosure process, to the sheriff sale, to the end of the redemption time period. In Minnesota, we have a 6 month right of redemption. This means the seller can redeem the house and keep it as their own. To do so, the seller would usually have to pay off all of the outstanding mortgage balance and any fines and fees. If you purchase a home during this period, the seller can payoff the loan and keep the house and your purchase would be cancelled.

Foreclosed

A foreclosed house means it has gone through the foreclosure process, and the seller did not redeem the house, and the bank has taken over the possession of the house. This usually happens at the end of the 6 month right of redemption period, but can be sooner in some instances, or later in some instances. At this point, the bank will put the home up for sale, and you can purchase it just like you would purchase a home from a traditional seller. There are a few differences though. The main difference is that the bank will want to make the sale final at the closing. They want you to have no recourse after the closing. If you close on the property, it then is wholly your own problem (if there is a problem). They also will not disclose any information about the history of the home. They will waive the Sellers Disclose.

Bottom line is that “In Foreclosure” means that the house is still in the process of being foreclosed, and once the process is done, the home has been foreclosed. On our MLS system, there are fields for “In Foreclosure” and “Bank Owned” where Bank Owned means a bank is selling the home, whether acquired by foreclosure or other means.