The Basics

What is a short sale?

A short sale occurs when a home owner can no longer pay the mortgage and needs to sell quickly to avoid losing the home. Essentially the home owner is saying to the lender... "If you do not allow my house to be sold for less than what I owe, I will lose my home and you will have to foreclose on it."

Why is buying a short sale a good deal?

Because short sales must sell quickly to avoid a costly foreclosure, lenders may approve lower priced offers allowing a buyer to purchase the home below market value. Ultimately, a home can be purchased for tens of thousands under market value.

Read more about short sales.

What is an REO

REO stands for “Real Estate Owned” by the lender/bank. This means the bank has taken possession of the subject property (usually through a foreclosure). After taking possession of a home, the bank will usually try to sell it in order to recover some of the unpaid loan amount.

Why is buying an REO a good deal?

Banks are not in the business of owning real estate. Sitting on a property can cost thousands in carrying costs and legal fees. That is why when banks take possession of a home, they try to sell it ASAP. As with most properties that need sell in a hurry, REOs are usually priced below market value to entice buyers.

Read more about REOs