What is a foreclosure in real estate?

A foreclosure in real estate is specifically the legal process where a lender reclaims a property due to missed payments. This occurs when a borrower defaults on their mortgage obligations, leading the lender to take action to recover the outstanding debt. The process often involves initiating legal proceedings, which allows the lender to sell the property to recoup the amount owed. It serves as a form of security for lenders, ensuring they can recover their investment when a borrower fails to comply with the terms of the loan.

The other options do not accurately describe foreclosure: transferring a property to a buyer involves a different set of legal procedures, while selling at a higher price pertains to real estate sales rather than the consequences of loan default. Lastly, the evaluation of a property's sale price is related to market assessments and appraisals, which again do not relate to the foreclosure process. The specific nature of foreclosure emphasizes the relationship between mortgage default and the lender's legal rights to reclaim the property.