What is a Foreclosure? What is a REO?
Foreclosure is the legal and professional proceeding in which a mortgagee, or other lien holder, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of redemption. A foreclosed property is commonly owned by the lender, which is why it is called bank owned. The industry term for bank owned is REO. The definition of REO is Real Estate Owned.
Buying a foreclosed home from a lender is similar to a normal real estate sale. However, lenders often will not sign or provide all of the disclosures. Many foreclosed homes are sold AS-IS. So, I would suggest getting a professional inspection, as it is difficult to get the lender/seller to pay for any repairs or major problems after the property closes escrow. You will normally have 17 days to inspect the home before you have to commit to forfeit your earnest money / deposit.
Call me if you have any questions about buying a foreclosed property.
What is a Short Sale?
A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrower. The lender has the final determination on how much the home will sell for. The owners just have to sign all of the paperwork.
Short sales can be very complicated and can take months before the lender agrees to sell the property at a reduced amount. If the buyer is patient, they will often get a great deal.
Please contact me and I will explain in detail what is involved in buying or selling a home as a short sale.
David Norwood - Central Coast Real Estate California | Foreclosed homes for sale | Free Multiple Listings MLS Search | San Luis Obispo County CA: Arroyo Grande, Pismo Beach, Avila Beach, San Luis Obispo, Morro Bay, Cambria, San Simeon, Harmony, Nipomo, Grover Beach, Cayucos, Los Osos, Atascadero, Santa Margarita, Paso Robles, and Templeton.