In our current housing market nearly one half of all homes for sale are either Short Sales or Bank Owned Properties (REO’s). What is the difference you ask? A home owner still holds title in a Short Sale but is selling the property below what they actually owe to the Lender to pay off their mortgage. Sometimes there may be two or more liens on the home that must be lowered or cleared in a Short Sale situation. For example, a first and second mortgage and maybe a line of credit exist on one home. All Lien holders (Lenders) must agree to the sales price and the bottom line payoff amount to each other in order to close on a Short Sale Home. If the home is in foreclosure and no agreement is reached in a timely manner the home may be put up for auction. The Government recently set up new Short Sale guidelines to speed up and simplify the process of selling and buying Short Sale Homes.

Bank Owned Properties (REO’s), are simply that, Bank Owned Properties. The Bank or Lender owns these homes outright and in most cases has already had a Broker’s price opinion as to what the home should be sold at. Most of the time REO’s are aggresivly priced so that they will be sold quickly. Lenders are swamped with high numbers of these homes and most remain on the market for only a few weeks, if that. Because your agent is dealing directly with the lender, in this case, the process is quick and easy.

As you can see the two main differences between Short Sales and Bank owned Properties (REO’s) are time and ease. Both options can be found everywhere in todays market. Be alert and ready to act upon anything you find yourself interested in because it may take months for a Short Sale or could be sold within days for an REO. If you want it put an offer on it today!