Do you know the difference between a short sale and an REO property? An REO property is Real Estate Owned Property which means the bank owns it because the bank has foreclosed on it and it did not sell. The bank has become the legal property owner and offers the home for sale to recover the amount owed on it.
A short sale is a work-out program for people that are behind on their mortgages. It allows a consumer to sell their home for less than the total amount owed before the bank forecloses on it. The foreclosure process runs in conjunction with the short sale, and a short sale approval does not necessarily guarantee the postponement of a foreclosure sale.
If you are behind on your mortgage payments and need to do a short sale, there is no guarantee the bank will allow you a short sale. A short sale is an option the bank may allow you to use. There are requirements that must be met before you can do a short sale. Because of the long process of a short sale, many buyers and agents steer clear of them. You need to have realistic expectations when doing a short sale and you will need a real estate agent that has experience and training with short sales.
At Register Real Estate Advisors, we have many agents that have the CDPE, Certified Distressed Property Expert, Designation. This designation means they know how to handle the short sale process and help guide consumers through it. You must trust the Realtor you are using in a short sale because you are going to be working with them for awhile and they are going to be asking for very sensitive financial information.
In a short sale, the lender must approve both the customer for the short sale and the property. It can be a very daunting process for the Realtor and the Client.
Now, with an REO Property, your Realtor will be working with the bank or lender on your REO Purchase. You will be required to show a pre-approval letter. If no utilities are on, you the buyer, may have to pay to turn them on. You must have utilities on for both inspections and appraisals. Many times with REO Properties the price is less than market value because the bank wants to sell it quickly, but that leads to a demand for the property. So when buying an REO Property you may have multiple buyers you are competing against.