Wednesday, May 13, 2009

Definitions: REO, Bank Owned, Foreclosure, Short Sale..Homes for sale...What's the difference?

Because I sell Real Estate in Ramona, and we have seen our fair share of distressed properties as of late, many of my clients have been asking me what is the difference between Bank owned homes, Shortsales, foreclosures, and REO'S. There is a quick answer and a more detailed answer to this question. So, Let's start with definitions:

REO - definition of REO - Real Estate Owned. Property which is in the possession of a lender as a result of foreclosure or forfeiture.
Bank Owned Homes- Home has foreclosed and bank now owns the property.
Short Sales- Could also be a pre-Foreclosure Short Sales- homes sold prior to foreclosure sale and "short" of a payoff.
Foreclosures- the legal proceedings initiated by a creditor to repossess the collateral for loan that is in default.
The first two- the bank now owns the property. Short Sales and Foreclosures are generally still owned by the seller not the bank yet.

I will continue to explain in further detail these types of properties. Depending on where the home lies in the continuum, could have an impact on your buying process. There can also be legal and tax implications upon sale, so please, if you are a seller, contact your attorney and CPA for more details on your particular situation, each is different and unique and your Real Estate Agent, unless they are a practicing Attorney cannot advise you on the legal aspects.
Copyright 2009-Regina Flores

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