The Colorado Springs Real Estate market has seen an influx in bank owned homes for sale in the past year.

What is a Bank Owned Home?

A "bank owned home" is a home that a mortgage company, or bank, takes ownership of after the home goes through a foreclosure. Sometimes this is referred to as REO - Real Estate Owned property.

What is a foreclosure?

Per the RealEstateWiki, a foreclosure is "a legal process whereby property pledged as security for a debt is sold to satisfy a debt in the event of a default in payments or terms."

Very Basic Example: John Smith finds a home for sale in Colorado Springs that he wants to buy. He talks to a mortgage lender and gets qualified to buy the home. The loan that he gets to purchase the home is called a mortgage. John makes monthly payments on this mortgage loan every month for 3 years. At the end of the 3 years, John becomes unable to keep making payments on this mortgage loan (many reasons can cause a person to no longer make payments). The mortgage loan now goes into default, and the mortgage holder, or bank, starts the foreclosure process. After a specified amount of time, John is forced to move out of the home and the property is now the property of the mortgage lender, or bank. Now, the property is bank-owned, or an REO Property.

Read More: RealtyTrac: A Detailed Overview of the Foreclosure Process

Banks are in the business of lending money, not owning homes. So, when a bank DOES wind up owning a home, they are motivated to SELL it, even at a loss, just to get it off their books.

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If you are looking to buy or sell a home in the current Colorado Springs real estate market, having professional representation by a competent real estate agent is a must, but you need to understand the different types of representation available.

As someone looking to buy a home in Colorado Springs, this is important because unrepresented buyers WILL NOT get the best possible deal on a home. Read Also: Top 5 Benefits of Having a Buyer's Agent Represent You.

As a homeowner looking to sell their home in Colorado Springs, representation is important because, historically a competent real estate agent will get you MORE money for your home - enough to cover their commission, and then some.

But what kind of representation is available for Colorado Springs home buyers and sellers?

In Colorado Springs (and all of Colorado for that matter) we have several different types of relationships between home buyers/sellers and us, the real estate agents. Here is a breakdown of the differnt "Broker Relationships", so that when you decide to buy or sell real estate you are better informed.

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When you are looking to buy a home in Colorado Springs, there are different ways to show ownership on title.

In Colorado Springs, you can show ownership of your home (or any other real estate) in the following ways:

Ownership in Severalty

This is the type of ownership that occurs when only one person is on title as the owner when they buy a home for sale in Colorado Springs.

Joint Tenancy

Joint tenancy is the most common form of ownership that occurs when 2 or more people own a home. This option offers a "right of survivorship" for each person, meaning that if one person were to die, the full ownership now belongs to the other person. Joint tenancy is often used when a married couple purchases a home together.

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