Definition of 'Non-REO Foreclosure'
A real estate property that has been foreclosed successfully. A non-REO (real estate owned) foreclosure has a purchaser that is willing to pay the amount owed to the bank for the property, or less if the bank is willing.
A non-REO foreclosure is different from an REO foreclosure, where a buyer could not be found and the lender takes possession, because the property never becomes real-estate owned (i.e., lender owned).
Investopedia explains 'Non-REO Foreclosure'
Most real estate agents will say that there is a lot more risk in purchasing a non-REO foreclosure. This is due to the fact that there might be liens and other expenses still attached to the home, and even worse, the new owner may have disgruntled tenants to evict.