(Short Sale, REO, Regular Sale)

 

Regular Sale – Buying a home in a more traditional real estate operation is easier. The only people who will consider and accept your offer to purchase are the home sellers. Most of the time the inspections have been done; the seller has filled out all the disclosures, and they can easily be looked over prior to making an offer.

 

REO – A real estate owned (REO) home is one that is owned by a lending institution as a result of forfeiture or failure to make mortgage payments. REO homes are popular with investors and home buyers looking for a deal.

Warnings and Myths – REO properties are sold in as-is condition and may be in disrepair. No inspections or disclosures are available from the seller and once in contract you may spend anywhere from $275 to $800 for those inspections. It is a myth that REO property sales prices are deeply discounted. However, buyers can still purchase an REO home at below market value if they perform their due diligence. Your real estate agent will go over comparable sales and property history (what may be available) to make sure you make the best offer possible.

 

Short Sale – A short sale is when a home is put on the market for an amount less than what is owed on the mortgage. Many properties are listed and advertized as short sales, however, without the right paperwork and legal agreements in place at the time of sale, these properties can be held up by the banks for months. Potential buyers usually give up and walk away, on to the next deal.

Warnings – short sale purchase time frames are substantially longer than REO properties. Most short sales will take approximately 4 to 6 months to complete from start to finish, whereas REO properties will typically take 30 days to close escrow. ***There are no guarantees a lender will accept a short sale.