The lender attempts to sell the home at a foreclosure auction. If the home sells at auction, the new buyer takes over ownership of the home and evicts the previous owner, if they still live there. If the home fails to sell at auction, ownership reverts to the bank and the property becomes a REO property. The bank will evict the previous owner and will normally list the home for sale.
A foreclosed home is one where the foreclosure process has been completed. Homes in pre-foreclosure status are in the midst of the foreclosure process, but not yet foreclosed upon.
Foreclosed homes may or may not be for sale. Read more about when you may be able to buy a foreclosed home.